REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Pre-Effective Amendment No.
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3
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/X/
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Post-Effective Amendment No.
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(Check appropriate box or boxes)
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DELAWARE INVESTMENTS® NATIONAL MUNICIPAL INCOME FUND
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(Exact Name of Registrant as Specified in Charter)
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(800) 523-1918
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Registrant’s Area Code and Telephone Number
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100 Independence, 610 Market Street, Philadelphia, PA 19106-2354
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(Address of Principal Executive Offices: Number, Street, City, State, Zip Code)
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David F. Connor, Esq., 100 Independence, 610 Market Street, Philadelphia, PA 19106-2354
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(Name and Address of Agent for Service)
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Please send copies of all communications to:
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Michael D. Mabry, Esq.
Stradley, Ronon, Stevens & Young, LLP
2005 Market Street, Suite 2600
Philadelphia, PA 19103-7018
(215) 564-8011
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Approximate Date of Proposed Public Offering: As soon as practicable after this Registration Statement becomes effective under the Securities Act of 1933, as amended.
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The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Title of Securities Being Registered
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Amount Being Registered(1)
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Proposed Maximum Offering Price per Unit(2)
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Proposed Maximum Aggregate Offering Price(1)
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Amount of Registration Fee(3)(4)
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Common Shares
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16,342,075
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$15.34
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$250,687,430.50
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$27,350.00
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(1)
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Estimated solely for purposes of calculating the registration fee pursuant to Rule 457 under the Securities Act of 1933.
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(2)
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Net asset value per common share as of September 22, 2021.
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(3)
(4)
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A registration fee of $109.10 was previously paid in connection with the N-14 8C filed on August 12, 2021.
A registration fee of $27,240.90 was previously paid in connection with the N-14 8C filed on September 23, 2021.
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1.
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Facing Page
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2.
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Contents Page
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3.
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Part A – Prospectus/Proxy Statement
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4.
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Part B - Statement of Additional Information
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5.
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Part C - Other Information
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6.
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Signatures
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7.
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Exhibits
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1.
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For Common shareholders of Delaware Investments Colorado Municipal Income Fund, Inc.: To vote on the approval of an Agreement and Plan of Acquisition that provides for (i)
the acquisition by Delaware Investments National Municipal Income Fund of substantially all of the property, assets and goodwill of Delaware Investments Colorado Municipal Income Fund, Inc. in exchange solely for full and fractional
shares of beneficial interest, with a par value of $0.01, of Delaware Investments National Municipal Income Fund, (ii) the pro rata distribution of such shares of Delaware Investments National Municipal Income Fund to the shareholders
of Delaware Investments Colorado Municipal Income Fund, Inc. according to their respective interests in liquidation of Delaware Investments Colorado Municipal Income Fund, Inc., and (iii) the dissolution of Delaware Investments Colorado
Municipal Income Fund, Inc. as soon as is practicable after the closing;
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2.
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For Common shareholders of Delaware Investments Minnesota Municipal Income Fund II, Inc.: To vote on the approval of an Agreement and Plan of Acquisition that provides for
(i) the acquisition by Delaware Investments National Municipal Income Fund of substantially all of the property, assets and goodwill of Delaware Investments Minnesota Municipal Income Fund II, Inc. in exchange solely for full and
fractional shares of beneficial interest, with a par value of $0.01, of Delaware Investments National Municipal Income Fund, (ii) the pro rata distribution of such shares of Delaware Investments National Municipal Income Fund to the
shareholders of Delaware Investments Minnesota Municipal Income Fund II, Inc. according to their respective interests in liquidation of Delaware Investments Minnesota Municipal Income Fund II, Inc., and (iii) the dissolution of Delaware
Investments Minnesota Municipal Income Fund II, Inc. as soon as is practicable after the closing;
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3.
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For Common shareholders of Delaware Investments National Municipal Income Fund: To vote on the approval of the issuance of additional Common Shares of Delaware Investments
National Municipal Income Fund in connection with the Reorganization (as defined below) of Delaware Investments Colorado Municipal Income Fund, Inc. and the Reorganization (as defined below) of Delaware Investments Minnesota Municipal
Income Fund II, Inc.;
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4.
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For Common shareholders of Delaware Investments Colorado Municipal Income Fund, Inc., Delaware Investments Minnesota Municipal Income Fund II, Inc., and Delaware Investments
National Municipal Income Fund: To elect a Board of Trustees or Directors for the Fund consisting of Jerome D. Abernathy, Thomas L. Bennett, H. Jeffrey Dobbs, John A. Fry, Joseph Harroz, Jr., Sandra A.J. Lawrence, Shawn K. Lytle,
Frances A. Sevilla-Sacasa, Thomas K. Whitford, Christianna Wood, and Janet L. Yeomans; and
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5.
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To transact any other business that properly comes before the Meeting and any adjournments of the Meeting.
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1.
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For shareholders of Delaware Investments Colorado Municipal Income Fund, Inc.: To vote on the approval of an Agreement and Plan of Acquisition (the Plan) that provides for
(i) the acquisition by Delaware Investments National Municipal Income Fund of substantially all of the property, assets and goodwill of Delaware Investments Colorado Municipal Income Fund, Inc. in exchange solely for full and fractional
shares of beneficial interest, with a par value of $0.01, of Delaware Investments National Municipal Income Fund, (ii) the pro rata distribution of such shares of Delaware Investments National Municipal Income Fund to the shareholders
of Delaware Investments Colorado Municipal Income Fund, Inc. according to their respective interests in liquidation of Delaware Investments Colorado Municipal Income Fund, Inc., and (iii) the dissolution of Delaware Investments Colorado
Municipal Income Fund, Inc. as soon as is practicable after the closing;
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2.
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For shareholders of Delaware Investments Minnesota Municipal Income Fund II, Inc.: To vote on the approval of an Agreement and Plan of Acquisition (the Plan) that provides
for (i) the acquisition by Delaware Investments National Municipal Income Fund of substantially all of the property, assets and goodwill of Delaware Investments Minnesota Municipal Income Fund II, Inc. in exchange solely for full and
fractional shares of beneficial interest, with a par value of $0.01, of Delaware Investments National Municipal Income Fund, (ii) the pro rata distribution of such shares of Delaware Investments National Municipal Income Fund to the
shareholders of Delaware Investments Minnesota Municipal Income Fund II, Inc. according to their respective interests in liquidation of Delaware Investments Minnesota Municipal Income Fund II, Inc., and (iii) the dissolution of Delaware
Investments Minnesota Municipal Income Fund II, Inc. as soon as is practicable after the closing;
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3.
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For shareholders of Delaware Investments National Municipal Income Fund: To vote on the approval of the issuance of additional Common Shares of Delaware Investments National
Municipal Income Fund in connection with the Reorganization (as defined below) of Delaware Investments Colorado Municipal Income Fund, Inc. and the Reorganization (as defined below) of Delaware Investments Minnesota Municipal Income
Fund II, Inc.;
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4.
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For shareholders of Delaware Investments Colorado Municipal Income Fund, Inc., Delaware Investments Minnesota Municipal Income Fund II, Inc., and Delaware Investments National
Municipal Income Fund: To elect a Board of Directors or Trustees for the Fund consisting of Jerome D. Abernathy, Thomas L. Bennett, H. Jeffrey Dobbs, John A. Fry, Joseph Harroz, Jr., Sandra A.J. Lawrence, Shawn K. Lytle, Frances
A. Sevilla-Sacasa, Thomas K. Whitford, Christianna Wood, and Janet L. Yeomans; and
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5.
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To transact any other business that properly comes before the Meeting and any adjournments of the Meeting.
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THE PROPOSALS
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3 |
What am I being asked to vote upon?
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How can I participate in the Meeting?
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What are the Boards’ recommendation regarding the Proposals?
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What will happen if shareholders approve the Proposals?
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PROPOSALS 1, 2, AND 3: THE REORGANIZATIONS
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What is the anticipated timing of the Reorganizations?
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What are the benefits of the Reorganizations to shareholders?
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What are the costs of the Reorganizations?
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What happens if a Reorganization is not approved?
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How will shareholder voting be handled?
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comparison of investment objectives, strategies, risks, AND investment restrictions
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How do the investment objectives, principal strategies, principal risks, and fundamental investment restrictions of the Acquired Funds compare against those of the Acquiring Fund?
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What is the historical turnover of each of the Funds?
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INFORMATION ABOUT THE FUNDS
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Where is each Fund organized?
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What are the fees and expenses of each Fund and what are the anticipated fees and expenses after the Reorganization(s)?
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How can I compare the costs of investing in the common shares of the Acquired Funds with the cost of investing in common shares of the combined Acquiring Fund?
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What are the general tax consequences of the Reorganizations?
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Who manages the Funds?
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How do the performance records of the Funds compare?
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Information about the Preferred Shares of the Funds
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Where can I find more financial information about the Funds?
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What are other key features of the Funds?
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REASONS FOR THE REORGANIZATIONS
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INFORMATION ABOUT THE REORGANIZATIONS AND THE PLAN
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How will the Reorganization be carried out?
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Who will pay the expenses of the Reorganizations?
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What are the tax consequences of each Reorganization?
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What should I know about shares of the Acquired Funds and Acquiring Fund?
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What are the capitalizations of the Funds and what might the capitalization be after the Reorganizations?
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Do the Directors and Officers own shares of the Funds?
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Who are the control persons and owners of record or beneficially 5% or more of any class of a Fund’s outstanding equity securities?
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COMPARISON OF ORGANIZATION, STRUCTURE AND GOVERNANCE OF THE FUNDS
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Comparison of State Law and Material Charter Document Provisions
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PROPOSAL 4: TO ELECT A BOARD OF DIRECTORS
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VOTING INFORMATION
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How many votes are necessary to approve the Proposals?
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How do I ensure my vote is accurately recorded?
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May I revoke my proxy?
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What other matters will be voted upon at the Meeting?
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Who is entitled to vote?
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How will proxies be solicited?
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Are there dissenters’ rights?
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MORE INFORMATION ABOUT THE FUNDS
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EXHIBITS TO PROSPECTUS/PROXY STATEMENT
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Acquisition of the Assets and Liabilities of:
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DELAWARE INVESTMENTS COLORADO MUNICIPAL INCOME FUND, INC.
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By:
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DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND
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Acquisition of the Assets and Liabilities of:
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DELAWARE INVESTMENTS MINNESOTA MUNICIPAL INCOME FUND II, INC.
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By:
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DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND
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Election of Directors/Trustees:
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DELAWARE INVESTMENTS COLORADO MUNICIPAL INCOME FUND, INC.
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DELAWARE INVESTMENTS MINNESOTA MUNICIPAL INCOME FUND II, INC.
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DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND
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1.
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For Common shareholders of VCF: To vote on the approval of an Agreement and Plan of Acquisition (the Plan) that provides for (i) the acquisition by VFL of substantially all
of the property, assets and goodwill of VCF in exchange solely for full and fractional shares of beneficial interest, with a par value of $0.01, of VFL, (ii) the pro rata distribution of such shares of VFL to the shareholders of VCF
according to their respective interests in liquidation of VCF, and (iii) the dissolution of VCF as soon as is practicable after the closing;
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2.
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For Common shareholders of VMM: To vote on the approval of an Agreement and Plan of Acquisition (the Plan) that provides for (i) the acquisition by VFL of substantially all
of the property, assets and goodwill of VMM in exchange solely for full and fractional shares of beneficial interest, with a par value of $0.01, of VFL, (ii) the pro rata distribution of such shares of VFL to the shareholders of VMM
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according to their respective interests in liquidation of VMM, and (iii) the dissolution of VMM as soon as is practicable after the closing;
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3.
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For Common shareholders of VFL: To vote on the approval of the issuance of additional Common Shares of VFL in connection with the VCF Reorganization and the VMM
Reorganization;
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4.
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For Common shareholders of VCF, VMM, and VFL: To elect a Board of Directors or Trustees for the Fund consisting of Jerome D. Abernathy, Thomas L. Bennett, H. Jeffrey Dobbs,
John A. Fry, Joseph Harroz, Jr., Sandra A.J. Lawrence, Shawn K. Lytle, Frances A. Sevilla-Sacasa, Thomas K. Whitford, Christianna Wood, and Janet L. Yeomans; and
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5.
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To transact any other business that properly comes before the Meeting and any adjournments of the Meeting.
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•
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Larger Net Asset Level - With a larger asset level, the Acquiring Fund may attract a larger set of investors through its national investment strategy which could potentially reduce its discount and reduce fixed expenses.
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•
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Greater Liquidity - The Acquiring Fund may have a more liquid trading environment and experience larger trading volume that may assist in leading to a smaller and less persistent discount.
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•
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Stronger Investment Opportunity - A larger Acquiring Fund will permit greater investment opportunities by allowing portfolio managers to invest in a wider range of bond issuances, particularly in light of fewer new bond issuances in
recent years by the states of Minnesota and Colorado.
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Additional Leverage Flexibility - In line with greater investment opportunities, a larger Acquiring Fund may permit the portfolio managers to explore new or additional forms of leverage that may
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be better received by potential underwriters and investors for a larger fund with a national bond strategy.
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VCF (Acquired Fund)
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VFL (Acquiring Fund)
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What is the Fund’s investment objective?
VCF seeks to provide current income exempt from both regular federal income tax and Colorado state income tax, consistent with the preservation of capital.
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What is the Fund’s investment objective?
VFL seeks to provide current income exempt from regular federal income tax, consistent with the preservation of capital.
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VCF (Acquired Fund)
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VFL (Acquiring Fund)
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What are the Fund’s principal investment strategies?
The Fund seeks to achieve its investment objective by investing under normal circumstances, substantially all (at least 80%) of its assets in tax-exempt “Colorado Municipal
Obligations.” “Municipal Obligations” are debt obligations issued by states, cities and local authorities, and possessions and certain territories of the United States and their political subdivisions, agencies and instrumentalities, the
interest on which, in the opinion of bond counsel or other counsel to the issuer of such securities, is, at the time of issuance, not includable in gross income for federal income tax purposes. “Colorado Municipal Obligations,” are
Municipal Obligations issued by or on behalf of the State of Colorado, its agencies, instrumentalities and political subdivisions and which bear interest that, in the opinion of bond counsel or other counsel to the issuer, is exempt from
both regular federal income tax and Colorado state income tax. The Fund may invest up to 20% of the Fund’s total assets in securities that generate interest that is subject to federal alternative minimum tax (AMT).
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What are the Fund’s principal investment strategies?
The Fund seeks to achieve its investment objective by investing under normal circumstances, substantially all (at least 80%) of its net assets in “Municipal Obligations.” “Municipal
Obligations” are debt obligations issued by or on behalf of a state or territory or its agencies, instrumentalities, municipalities and political subdivisions, the interest payable on which is, in the opinion of bond counsel, excludable
from gross income for purposes of federal income taxation (except, in certain instances, the alternative minimum tax, depending upon the shareholder’s tax status). The Fund may invest up to 20% of the Fund’s assets in securities that
generate interest that is subject to federal alternative minimum tax (AMT). The Fund may invest without limitation in uninsured, “investment grade” Municipal Obligations. “Investment grade” means that, at the time of investment, a
Municipal Obligation has a credit rating of at least Baa by Moody’s, or BBB by Standard & Poor’s Financial Services LLC (S&P), or is unrated but judged by the Manager, to be of comparable quality. The Fund may invest up to 20% of
its net assets in Municipal Obligations that are rated below
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The Fund may invest without limitation in Colorado Municipal Obligations rated investment grade (i.e., those rated BBB and above or unrated but judged to be of comparable quality by the Fund’s investment adviser). The Fund may
also invest up to 20% of its net assets in Colorado Municipal Obligations with an investment rating of Ba/BB or lower, or that are unrated but judged to be of comparable quality by the Fund’s investment adviser. In normal
circumstances, the Fund does not intend to invest more than 5% of its assets in instruments other than Municipal Obligations.
The Fund intends to emphasize investments in Colorado Municipal Obligations with long-term maturities in order to maintain an average portfolio maturity of 20 to 30 years. The average portfolio maturity, however, may be shortened
from time to time depending upon market conditions. As a result, the Fund’s portfolio at any given time may include both long- and intermediate-term Colorado Municipal Obligations.
The Fund may invest without limit in state or municipal leases and participation interests therein. Municipal lease obligations held by the Fund will be treated as illiquid unless they are determined to be liquid pursuant to
guidelines established by the Fund’s Board.
The Fund may invest in advanced refunded bonds, escrow secured bonds or defeased bonds.
The Fund may invest up to 20% of its net assets in municipal obligations issued by or on behalf of territories of the United States – such as Guam, the U.S. Virgin Islands or Puerto Rico – that are exempt from Colorado and
federal income tax, subject to the Fund’s fundamental investment policy to invest 80% of its assets in Colorado municipal obligations.
The Fund may invest up to 5% of its total assets in Colorado Municipal Obligations whose rates vary inversely with changes in market rates of interest (so-called “inverse floaters”).
Although in normal circumstances the Fund does not intend to invest more than 5% of its assets in instruments other than Municipal Obligations, the Fund may attempt to hedge its investment portfolio against market risk by
engaging in various hedging transactions. In particular, the Fund may purchase and sell futures contracts, enter into various interest rate transactions, and may purchase and sell (or write) exchange-listed and over-the-counter put
and call options on securities and futures contracts (collectively, “Hedging Transactions”). Hedging Transactions may be used to attempt to protect against possible changes in the market value of the Fund’s portfolio resulting from
trends in the debt securities markets, to protect the Fund’s unrealized gains in the value of its portfolio securities, to facilitate the sale of such securities for investment purposes, to establish a position in the securities
markets as a temporary substitute for purchasing particular securities, to manage
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investment grade or that are unrated but judged by the Manager to be of comparable quality.
The Manager analyzes economic and market conditions, seeking to identify the securities or market sectors that the Manager thinks are the best investments for the Fund. The Fund generally invests in debt obligations issued by
state and local governments and their political subdivisions, agencies, authorities, and instrumentalities that are exempt from federal income tax. The Fund may also invest in debt obligations issued by or for the District of
Columbia, and its political subdivisions, agencies, authorities, and instrumentalities or territories and possessions of the United States that are exempt from federal income tax.
The Fund will generally invest in securities for income rather than seeking capital appreciation through active trading. However, the Fund may sell securities for a variety of reasons, such as to reinvest the proceeds in higher
yielding securities, to eliminate investments not consistent with the preservation of capital, to fund tender offers, or to address a weakening credit situation.
The Fund invests its assets in securities with maturities of various lengths, depending on market conditions, but will have a dollar-weighted average effective maturity of between 20 and 30 years. The Manager will adjust the
average maturity of the bonds in the Fund’s portfolio to attempt to provide a current tax-exempt income, consistent with preservation of capital. The Fund may focus its investments in certain types of bonds or in a certain segment
of the municipal bond market when the supply of bonds in other sectors do not suit its investment needs.
The Fund may invest without limitation in general obligation bonds in the top four quality grades or bonds that are unrated, but which the Manager determines to be of equal quality. The Fund may invest without limitation in
revenue bonds in the top four quality grades or bonds that are unrated, but which the Manager determines to be of equal quality.
The Fund may invest without limitation in insured Municipal Obligations. In addition, insurance is available on uninsured bonds and the Fund may purchase such insurance directly. The Manager will generally do so only if it
believes that purchasing and insuring a Municipal Obligation provides an investment opportunity at least comparable to owning other available insured Municipal Obligations.
Private activity or private placement bonds are municipal bond issues whose proceeds are used to finance certain nongovernment activities, including some types of industrial revenue bonds such as privately owned sports and
convention facilities. The Tax Reform Act of 1986 subjects interest income from these bonds to the federal alternative minimum tax and makes the tax-exempt status of certain bonds dependent on the issuer’s compliance with specific
requirements after the bonds are issued. As described above, the Fund may invest up to 20% of its assets in bonds whose income is subject to the federal alternative minimum tax. This means that a portion of the
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the effective dollar-weighted average duration of the Fund’s portfolio or for other risk management purposes.
The Fund may enter into contracts for the purchase or sale for future delivery (futures contracts) of debt securities, aggregates of debt securities or indices or prices thereof, other financial indices and U.S. Government debt
securities to hedge the value of its portfolio securities that might result from a change in interest rates. The Fund will engage in such transactions for bona fide hedging, risk management (including duration management) and other
portfolio management purposes, in each case in accordance with the rules and regulations of the Commodity Futures Trading Commission. Although the Fund generally will purchase or sell only those futures contracts and options thereon
for which there appears to be a liquid market, there is no assurance that a liquid market on an exchange will exist for any particular futures contract or option thereon at any particular time. It is expected that the initial margin
on futures contracts the Fund may purchase or sell may range from approximately 3% to approximately 15% of the value of the securities (or the securities index) underlying the contract. In certain circumstances, however, such as
during periods of high volatility, the Fund may be required by an exchange to increase the level of its initial margin payment.
The Fund may enter into interest rate swaps and the purchase or sale of interest rate caps and floors. The Fund expects to enter into these transactions primarily to preserve a return or spread on a particular investment or
portion of its portfolio, as a duration management technique or to protect against any increase in the price of securities the Fund anticipates purchasing at a later date. The Fund intends to use these transactions as a hedge and
not as a speculative investment. The Fund will not sell interest rate caps or floors based on securities that it does not own. The Fund will not enter into any interest rate swap, cap or floor transaction unless the unsecured senior
debt or the claims-paying ability of the other party thereto is rated at least “A” by at least one nationally recognized rating organization at the time of entering into such transaction. There is no limit on the amount of interest
rate swap transactions that may be entered into by the Fund. The aggregate purchase price of caps and floors held by the Fund may not exceed 5% of the Fund’s assets. The Fund may sell (i.e., write) caps and floors without
limitation, as long as it designates on the Fund’s books liquid assets in an amount sufficient to cover its obligations under the cap or floor.
The Fund may purchase put options (puts) that relate to Municipal Obligations (whether or not it holds such securities in its portfolio) or futures on such securities. The Fund may also sell puts on Municipal Obligations or
futures on such securities if the Fund’s continuing obligations on such puts are secured by designated assets on the Fund’s books consisting of cash or liquid debt securities having a value not less than the exercise price. The Fund
will not sell puts if, as a result, more than 50% of the Fund’s assets would be required to cover its
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Fund’s distributions could be subject to the federal alternative minimum tax that applies to certain taxpayers.
The Fund may invest without limit in advance refunded bonds.
The Fund may invest without limitation in high-quality, short-term tax-free instruments.
The Fund may invest in privately placed securities, including those that are eligible for resale only among certain institutional buyers without registration, commonly known as
“Rule 144A Securities.” Restricted securities that are determined to be illiquid may not exceed the Fund’s 15% limit on investments in illiquid securities.
The Fund may invest without limitation in municipal lease obligations, primarily through certificates of participation rated in the top four quality grades by S&P or another
nationally recognized statistical rating agency. As with the Fund’s other investments, the Manager expects that investments in municipal lease obligations will be exempt from regular federal income taxes. The Fund will rely on the
opinion of the bond issuer’s counsel for a determination of the bond’s tax-exempt status.
The Fund may invest in zero coupon bonds.
Credit quality restrictions for the Fund apply only at the time of purchase. The Fund may continue to hold a security whose quality rating has been lowered or, in the case of an
unrated bond, after the Manager has changed its assessment of its credit quality.
The Fund may buy or sell securities on a when-issued or delayed-delivery basis; that is, paying for securities before delivery or taking delivery at a later date. The Fund will
designate cash or securities in amounts sufficient to cover its obligations, and will value the designated assets daily.
Where the Manager feels there is a limited supply of appropriate investments, the Fund may invest more than 25% of its total assets in Municipal Obligations relating to similar
types of projects or with other similar economic, business, or political characteristics (such as bonds of housing finance agencies or healthcare facilities). In addition, the Fund may invest more than 25% of its assets in industrial
development bonds or, in the case of the Fund, pollution control bonds, which may be backed only by the assets and revenues of a nongovernmental issuer. The Fund will not, however, invest more than 25% of its total assets in bonds
issued for companies in the same business sector.
The Fund may borrow money from banks as a temporary measure for extraordinary or emergency purposes but normally does not do so. The Fund will not borrow money in excess of
one-third of the value of its assets.
In response to unfavorable market conditions, the Fund may invest in taxable instruments for temporary defensive purposes. These could include obligations of the U.S. government,
its agencies and instrumentalities, commercial paper, cash, certificates of deposit of domestic banks,
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potential obligation under its hedging and other investment transactions.
In order to reduce fluctuations in net asset value, the Fund may sell or purchase call options (calls) on Municipal Obligations that are traded on U.S. securities exchanges and in the over-the-counter markets and related
futures on such securities. The Fund may write call options only if the call option is “covered.” The Fund may write put options only if the put option is “secured.” Although the Fund will enter into over-the-counter options only
with dealers that agree to enter into, and which are expected to be capable of entering into, closing transactions with the Fund, there can be no assurance that the Fund will be able to liquidate an over-the-counter option at a
favorable price at any time prior to expiration. The Fund will not engage in over-the-counter options transactions if the amount invested by the Fund in over-the-counter options, plus, with respect to over-the-counter options
written by the Fund, the amounts required to be treated as illiquid pursuant to SEC staff positions, plus the amount invested by the Fund in illiquid securities, would exceed 20% of the Fund’s total assets.
The Fund also may purchase and write call and put options on securities indices.
The Fund may also purchase and sell (write) call and put options on financial futures contracts.
The Fund may enter into credit default swap (CDS) contracts to the extent consistent with its investment objective and strategies. The Fund might use CDS contracts to limit or to reduce the risk exposure of the Fund to defaults
of the issuer or issuers of its holdings (i.e., to reduce risk when the Fund owns or has exposure to such securities). The Fund also might use CDS contracts to create or vary exposure to securities or markets or as a tax
management tool. The Fund will not be permitted to enter into any swap transaction unless, at the time of entering into such transaction, the unsecured long-term debt of the actual counterparty, combined with any credit
enhancements, is rated at least BBB- by S&P or Baa3 by Moody’s or is determined to be of equivalent credit quality by the Manager.
The Fund may purchase Municipal Obligations on a “when-issued” basis and may purchase or sell Municipal Obligations on a “forward commitment” basis in order to acquire the security or to hedge against anticipated changes in
interest rates and prices.
During temporary defensive periods (e.g., when, in the Manager’s opinion, temporary imbalances of supply and demand or other temporary dislocations in the tax-exempt bond market adversely affect the price at which long- or
intermediate-term Colorado Municipal Obligations are available), and in order to keep cash on hand fully invested, the Fund may invest any percentage of its assets in temporary investments. The Fund intends to invest in taxable
temporary investments only in the event that suitable tax-exempt temporary investments are not available at reasonable prices and yields. The Fund will
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repurchase agreements, reverse repurchase agreements, other cash equivalents, and other debt instruments. These investments may not be consistent with the Fund’s investment objective. To the extent that the Fund holds such
investments, it may be unable to achieve its investment objective.
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invest only in taxable temporary investments which are U.S. Government securities.
Portfolio trading may be undertaken to accomplish the investment objective of the Fund in relation to actual and anticipated movements in interest rates. In addition, a security may be sold and another of comparable quality
purchased at approximately the same time to take advantage of what the Manager believes to be a temporary price disparity between the two securities. The Fund may also engage to a limited extent in short-term trading consistent
with its investment objective.
The Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act, and other
securities which may not be readily marketable. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Fund’s 15% limit on investments in illiquid securities.
Subject to the foregoing, the Fund will attempt to achieve its investment objective by prudent selection of Colorado Municipal Obligations with a view to holding them for investment. The Fund anticipates that its annual
portfolio turnover rate will generally not exceed 100%. However, the rate of turnover will not be a limiting factor when the Fund deems it desirable to sell or purchase securities. Therefore, depending upon market conditions, the
annual portfolio turnover rate of the Fund may exceed 100% in particular years.
The Municipal Obligations market is rapidly evolving; types of Municipal Obligations other than those described above can be expected to be developed and marketed from time to time. Consistent with its investment limitations,
the Fund expects to invest in those new types of Municipal Obligations that the Manager believes may assist the Fund in achieving its investment objective. The Fund will notify shareholders to the extent that it intends to invest
more than 5% of its net assets in such obligations.
|
Risk
|
Acquired Fund
|
Acquiring Fund
|
Fixed income related risks:
|
||
Interest rate risk
|
X
|
X
|
High yield (junk bond) risk
|
X
|
X
|
Credit risk
|
X
|
X
|
Call risk
|
X
|
X
|
Colorado Municipal Obligations risk
|
X
|
X |
Other risks:
|
||
Net asset value discount risk
|
X
|
X
|
Market risk
|
X
|
X
|
Security risk
|
X
|
|
Industry and sector risk
|
X
|
X
|
Geographic concentration risk
|
X
|
X
|
Leveraging risk
|
X
|
X
|
Alternative minimum tax risk
|
X
|
X
|
Derivatives risk
|
X
|
|
Government and regulatory risk
|
X
|
X
|
Liquidity risk
|
X
|
X
|
IBOR risk
|
X
|
X
|
Active management and selection risk
|
X
|
X
|
VMM (Acquired Fund)
|
VFL (Acquiring Fund)
|
What is the Fund’s investment objective?
VMM seeks to provide current income exempt from both regular federal income tax and Minnesota state personal income tax, consistent with the preservation of capital.
|
What is the Fund’s investment objective?
VFL seeks to provide current income exempt from regular federal income tax, consistent with the preservation of capital.
|
VMM (Acquired Fund)
|
VFL (Acquiring Fund)
|
What are the Fund’s principal investment strategies?
The Fund seeks to achieve its investment objective by investing substantially all (in excess of 80%) of its net assets in tax-exempt “Minnesota Municipal Obligations” rated
“investment grade” at the time of investment. “Municipal Obligations” are debt obligations issued by states, cities and local authorities, and possessions and certain territories of the United States and their political subdivisions,
agencies and instrumentalities, the interest on which, in the opinion of bond counsel or other counsel to the issuer of such securities, is, at the time of issuance, not includable in gross income for federal income tax purposes.
“Minnesota Municipal Obligations” are Municipal Obligations issued by or on behalf of the State of Minnesota, its agencies, instrumentalities and political subdivisions and which bear interest that, in the opinion of bond counsel or other
counsel to the issuer, is exempt from both regular federal income tax and Minnesota state personal income tax. “Investment grade” means that, at the time of investment, a Minnesota Municipal Obligation has a credit rating of at least Baa
by Moody’s, or BBB by Standard & Poor’s Financial Services LLC (S&P). The Fund may invest up to 20% of the Fund’s total assets in securities that generate interest that is subject to federal and Minnesota alternative minimum tax
(AMT). In normal circumstances, the Fund does not intend to invest more than 5% of its assets in instruments other than Municipal Obligations.
The Fund may invest without limit in state or municipal leases and participation interests therein. Municipal lease obligations held by the Fund will be treated as illiquid unless
they are determined to be liquid pursuant to guidelines established by the Fund’s Board.
The Fund intends to emphasize investments in Minnesota Municipal Obligations with long-term maturities in order to maintain an average portfolio maturity of 20 to 30 years. The
average portfolio maturity, however, may be shortened from time to time depending upon market conditions. As a result, the Fund’s portfolio at any given time may include both long- and intermediate-term Minnesota Municipal Obligations.
The Fund may also, as a matter of non-fundamental policy: (1) invest up to 20% of its total assets in unrated Minnesota Municipal Obligations determined by the Manager to be of
comparable quality to investment grade rated Minnesota Municipal Obligations; (2) invest up to 20% of its net assets in municipal bonds that are rated Ba1/BB+ or lower or that are unrated but judged to be of comparable quality by the
Manager; (3) continue to hold Municipal Obligations that have been downgraded by Moody’s or S&P below investment grade after purchase, subject to the Fund’s policy to invest no more than 20% of its net assets in Municipal Obligations
rated below investment grade; and (4) purchase Minnesota Municipal Obligations on a “when-issued” basis and purchase or sell Minnesota Municipal Obligations on a “forward commitment” basis in order to acquire the security or to hedge
against anticipated changes in interest rates and prices.
The Fund may invest in advanced refunded bonds, escrow secured bonds or defeased bonds.
|
What are the Fund’s principal investment strategies?
The Fund seeks to achieve its investment objective by investing under normal circumstances, substantially all (at least 80%) of its net assets in “Municipal Obligations.” “Municipal
Obligations” are debt obligations issued by or on behalf of a state or territory or its agencies, instrumentalities, municipalities and political subdivisions, the interest payable on which is, in the opinion of bond counsel, excludable
from gross income for purposes of federal income taxation (except, in certain instances, the alternative minimum tax, depending upon the shareholder’s tax status). The Fund may invest up to 20% of the Fund’s assets in securities that
generate interest that is subject to federal alternative minimum tax (AMT). The Fund may invest without limitation in uninsured, “investment grade” Municipal Obligations. “Investment grade” means that, at the time of investment, a
Municipal Obligation has a credit rating of at least Baa by Moody’s, or BBB by Standard & Poor’s Financial Services LLC (S&P), or is unrated but judged by the Manager, to be of comparable quality. The Fund may invest up to 20% of
its net assets in Municipal Obligations that are rated below investment grade or that are unrated but judged by the Manager to be of comparable quality.
The Manager analyzes economic and market conditions, seeking to identify the securities or market sectors that the Manager thinks are the best investments for the Fund. The Fund
generally invests in debt obligations issued by state and local governments and their political subdivisions, agencies, authorities, and instrumentalities that are exempt from federal income tax. The Fund may also invest in debt
obligations issued by or for the District of Columbia, and its political subdivisions, agencies, authorities, and instrumentalities or territories and possessions of the United States that are exempt from federal income tax.
The Fund will generally invest in securities for income rather than seeking capital appreciation through active trading. However, the Fund may sell securities for a variety of
reasons, such as to reinvest the proceeds in higher yielding securities, to eliminate investments not consistent with the preservation of capital, to fund tender offers, or to address a weakening credit situation.
The Fund invests its assets in securities with maturities of various lengths, depending on market conditions, but will have a dollar-weighted average effective maturity of between
20 and 30 years. The Manager will adjust the average maturity of the bonds in the Fund’s portfolio to attempt to provide a current tax-exempt income, consistent with preservation of capital. The Fund may focus its investments in certain
types of bonds or in a certain segment of the municipal bond market when the supply of bonds in other sectors do not suit its investment needs.
The Fund may invest without limitation in general obligation bonds in the top four quality grades or bonds that are unrated, but which the Manager determines to be of equal quality.
The Fund may invest without limitation in revenue bonds in the top four quality grades or bonds that are unrated, but which the Manager determines to be of equal quality.
|
In addition, the Fund may invest in Municipal Obligations issued by or on behalf of territories of the United States – such as Guam, the U.S. Virgin Islands or Puerto Rico – that are exempt from
Minnesota and federal income tax to the extent that not more than 5% of the Fund’s exempt interest dividends are derived from such obligations, subject to the Fund’s fundamental investment policy to invest 80% of its net assets in
Minnesota municipal obligations. As a matter of policy, the Fund will seek to derive at least 95% of its exempt-interest dividends from Minnesota Municipal Obligations in order to qualify to pay tax-exempt dividends on income from
Minnesota Municipal Obligations.
The Fund may invest up to 5% of its net assets in Minnesota Municipal Obligations whose rates vary inversely with changes in market rates of interest (so-called “inverse floaters”).
The Fund may invest in custodial receipts or certificates that evidence ownership of future interest payments, principal payments or both on certain municipal securities.
Although in normal circumstances the Fund does not intend to invest more than 5% of its assets in instruments other than Municipal Obligations, the Fund may attempt to hedge its investment portfolio
against market risk (including interest rate risk) by engaging in various hedging transactions. In particular, the Fund may purchase and sell futures contracts, enter into various interest rate transactions, and may purchase and sell
(or write) exchange-listed and over-the-counter put and call options on Municipal Obligations, other debt securities, aggregates of debt securities or indices of interest rates or prices thereof or other financial indices and on
futures contracts (collectively, Hedging Transactions). The Fund intends to engage in Hedging Transactions if it appears advantageous to the Manager to do so in order to pursue the Fund’s investment objective, to seek to hedge against
the effects of market conditions and to seek to stabilize the value of its assets.
The Fund may enter into contracts for the purchase or sale for future delivery (futures contracts) of debt securities, aggregates of debt securities or indices or prices thereof, other financial indices
and U.S. Government debt securities to hedge against a decline in the value of its portfolio securities that might result from a change in interest rates. The Fund will engage in such transactions for bona fide hedging, risk
management (including duration management) and other portfolio management purposes, in each case in accordance with the rules and regulations of the Commodity Futures Trading Commission.
|
The Fund may invest without limitation in insured Municipal Obligations. In addition, insurance is available on uninsured bonds and the Fund may purchase such
insurance directly. The Manager will generally do so only if it believes that purchasing and insuring a Municipal Obligation provides an investment opportunity at least comparable to owning other available insured Municipal Obligations.
Private activity or private placement bonds are municipal bond issues whose proceeds are used to finance certain nongovernment activities, including some types
of industrial revenue bonds such as privately owned sports and convention facilities. The Tax Reform Act of 1986 subjects interest income from these bonds to the federal alternative minimum tax and makes the tax-exempt status of certain
bonds dependent on the issuer’s compliance with specific requirements after the bonds are issued. As described above, the Fund may invest up to 20% of its assets in bonds whose income is subject to the federal alternative minimum tax.
This means that a portion of the Fund’s distributions could be subject to the federal alternative minimum tax that applies to certain taxpayers.
The Fund may invest without limit in advance refunded bonds.
The Fund may invest without limitation in high-quality, short-term tax-free instruments.
The Fund may invest in privately placed securities, including those that are eligible for resale only among certain institutional buyers without registration,
commonly known as “Rule 144A Securities.” Restricted securities that are determined to be illiquid may not exceed the Fund’s 15% limit on investments in illiquid securities.
The Fund may invest without limitation in municipal lease obligations, primarily through certificates of participation rated in the top four quality grades by
S&P or another nationally recognized statistical rating agency. As with the Fund’s other investments, the Manager expects that investments in municipal lease obligations will be exempt from regular federal income taxes. The Fund
will rely on the opinion of the bond issuer’s counsel for a determination of the bond’s tax-exempt status.
The Fund may invest in zero coupon bonds.
Credit quality restrictions for the Fund apply only at the time of purchase. The Fund may continue to hold a security whose quality rating has been lowered or, in the
|
The Fund may enter into interest rate swaps and the purchase and sale of interest rate caps and floors. The Fund expects to enter into these transactions
primarily to preserve a return or spread on a particular investment or portion of its portfolio, to manage the average weighted maturity of the Fund’s portfolio or to protect against any increase in the price of securities the Fund
anticipates purchasing. The Fund intends to use these transactions as a hedge and not as a speculative investment. The Fund will not enter into any interest rate transaction unless the unsecured senior debt or the claims-paying
ability of the other party to the transaction is rated at least “A” or the equivalent by at least one nationally recognized rating organization at the time of entering into the transaction. The Fund may enter into any amount of
interest rate swaps. The Fund may not sell interest rate caps or floors based on securities that it does not own. The aggregate purchase price of caps and floors held by the Fund may not exceed 5% of the Fund’s assets. However, the
Fund may sell (i.e., write) caps and floors without limitation, as long as it designates on the Fund’s books liquid assets in an amount sufficient to cover its obligations under the cap or floor.
The Fund may purchase put options (puts) that relate to Municipal Obligations (whether or not it holds such securities in its portfolio) or futures on such
securities. The Fund may also write put options, but only on a secured basis, which means that the Fund will designate on its books cash or U.S. government securities in an amount not less than the exercise price of the option at all
times during the option period. The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the
underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase puts that relate to Minnesota Municipal Obligations or futures on Minnesota Municipal Obligations. The Fund may
also sell puts on Minnesota Municipal Obligations or futures on Minnesota Municipal Obligations if the Fund’s continuing obligations on such puts are secured by assets designated on the Fund’s books consisting of cash or liquid debt
securities having an aggregate value not less than the exercise price. The Fund will not sell puts if, as a result, more than 50% of the Fund’s assets would be required to cover its potential obligation under its hedging and other
investment transactions.
In order to reduce fluctuations in NAV, the Fund may sell or purchase call options (calls) on Municipal Obligations that are traded on U.S. securities exchanges and in the
over-the-counter markets and related futures on such securities. The Fund may purchase call options to hedge against an increase in the price of securities that the Fund anticipates purchasing in the future. The Fund may sell or
purchase calls on Minnesota Municipal Obligations that are traded on the U.S. securities exchanges and in the over-the-counter markets. The Fund may also sell or purchase calls on futures contracts on those Minnesota Municipal
Obligations. The Fund will only write (sell) calls on securities or futures contracts it owns, or will designate on the Fund’s books liquid assets in an amount sufficient to purchase the underlying security or futures contract,
adjusted to changes in market prices on a daily basis. The Fund may purchase call options to the extent that premiums paid by the Fund do not aggregate more than 2% of the Fund’s total assets.
The Fund may also purchase and write call and put options on securities indices.
|
case of an unrated bond, after the Manager has changed its assessment of its credit quality.
The Fund may buy or sell securities on a when-issued or delayed-delivery basis; that is, paying for securities before delivery or taking delivery at a later date. The Fund will designate cash or
securities in amounts sufficient to cover its obligations, and will value the designated assets daily.
Where the Manager feels there is a limited supply of appropriate investments, the Fund may invest more than 25% of its total assets in Municipal Obligations relating to similar types of projects or with
other similar economic, business, or political characteristics (such as bonds of housing finance agencies or healthcare facilities). In addition, the Fund may invest more than 25% of its assets in industrial development bonds or, in
the case of the Fund, pollution control bonds, which may be backed only by the assets and revenues of a nongovernmental issuer. The Fund will not, however, invest more than 25% of its total assets in bonds issued for companies in the
same business sector.
The Fund may borrow money from banks as a temporary measure for extraordinary or emergency purposes but normally does not do so. The Fund will not borrow money in excess of one-third of the value of its
assets.
In response to unfavorable market conditions, the Fund may invest in taxable instruments for temporary defensive purposes. These could include obligations of the U.S. government, its agencies and instrumentalities, commercial
paper, cash, certificates of deposit of domestic banks, repurchase agreements, reverse repurchase agreements, other cash equivalents, and other debt instruments. These investments may not be consistent with the Fund’s investment
objective. To the extent that the Fund holds such investments, it may be unable to achieve its investment objective.
|
To the extent that over-the-counter options are deemed to be illiquid, they are subject to the Fund’s limitation that a maximum of 15% of its net assets be invested in illiquid securities.
The Fund may enter into credit default swap (CDS) contracts to the extent consistent with its investment objective and strategies. The Fund might use CDS contracts to limit or to reduce the risk
exposure of the Fund to defaults of the issuer or issuers of its holdings (i.e., to reduce risk when the Fund owns or has exposure to such securities). The Fund also might use CDS contracts to create or vary exposure to securities
or markets or as a tax management tool. The Fund will not be permitted to enter into any swap transaction unless, at the time of entering into such transaction, the unsecured long-term debt of the actual counterparty, combined
with any credit enhancements, is rated at least BBB- by S&P or Baa3 by Moody’s or is determined to be of equivalent credit quality by the Manager.
The Fund may invest in a temporary defensive manner when the Manager believes that the Fund will be affected by adverse market conditions. When investing in this manner, the Fund may hold all or a
substantial part of its assets in short-term, high quality securities which may be either tax-exempt or taxable. The Fund may invest only in taxable temporary investments that are U.S. Government securities. To the extent that the
Fund invests in a temporary defensive manner, the Fund may not be able to achieve its investment objective.
Portfolio trading will be undertaken principally to accomplish the Fund’s objective in relation to actual and anticipated movements in the general level of interest rates. In addition, a security may
be sold and another security of comparable quality purchased at approximately the same time to take advantage of what the Manager believes to be a temporary price disparity between the two securities. The Fund may also engage to a
limited extent in short-term trading consistent with its investment objective.
The Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of
the Securities Act, and other securities which may not be readily marketable. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Fund’s 15% limit on investments in
illiquid securities.
|
|
The Fund is free to dispose of portfolio securities at any time, subject to complying with the Code and the 1940 Act, when changes in circumstances or conditions make such a move desirable in light
of the Fund’s investment objective. The Fund will not attempt to achieve or be limited to a predetermined rate of portfolio turnover. The Fund anticipates that its annual portfolio turnover will not exceed 100%. However, the
rate of turnover will not be a limiting factor when the Fund deems it desirable to sell or purchase securities. Therefore, depending on market conditions, the annual portfolio turnover rate of the Fund may exceed 100% in
particular years.
The Municipal Obligations market is rapidly evolving; types of Municipal Obligations other than those described above can be expected to be developed and marketed from time to time. Consistent with its investment limitations,
the Fund expects to invest in those new types of Municipal Obligations that the Manager believes may assist the Fund in achieving its investment objective. The Fund will notify shareholders to the extent that it intends to
invest more than 15% of its net assets in such obligations.
|
|
Risk
|
Acquired Fund
|
Acquiring Fund
|
Fixed income related risks:
|
||
Interest rate risk
|
X
|
X
|
High yield (junk bond) risk
|
X
|
X
|
Credit risk
|
X
|
X
|
Call risk
|
X
|
X
|
Minnesota Municipal Obligations risk
|
X
|
X |
Other risks:
|
||
Net asset value discount risk
|
X
|
X
|
Market risk
|
X
|
X
|
Security risk
|
X
|
|
Industry and sector risk
|
X
|
X
|
Geographic concentration risk
|
X
|
X
|
Leveraging risk
|
X
|
X
|
Alternative minimum tax risk
|
X
|
X
|
Derivatives risk
|
X
|
|
Government and regulatory risk
|
X
|
X
|
Liquidity risk
|
X
|
X
|
IBOR risk
|
X
|
X
|
Active management and selection risk
|
X
|
X
|
Assumed Return on Portfolio (Net of Expenses)
|
-10%
|
-5%
|
0%
|
5%
|
10%
|
Corresponding Return to Common Shareholders
|
-15.04%
|
-7.89%
|
-0.73%
|
6.42%
|
13.57%
|
Acquired Fund
|
Fiscal Year Ended 3/31/21
|
Fiscal Year Ended 3/31/20
|
Fiscal Year Ended 3/31/19
|
VCF
|
19%
|
31%
|
7%
|
VMM
|
2%
|
14%
|
13%
|
Acquiring Fund
|
Fiscal Year Ended 3/31/21
|
Fiscal Year Ended 3/31/20
|
Fiscal Year Ended 3/31/19
|
VFL
|
19%
|
33%
|
16%
|
VCF
|
VMM
|
VFL
|
Pro forma Combined Fund (VCF into VFL)
|
Pro forma Combined Fund (VMM into VFL)
|
Pro forma Combined Fund (VCF and VMM into VFL)
|
100.27%
|
99.94%
|
100.19%
|
100.23%
|
100.01%
|
100.07%
|
VCF
|
VMM
|
Acquiring Fund (VFL)
|
Pro forma Combined Fund (VCF into Acquiring Fund)
|
Pro forma Combined Fund (VMM into Acquiring Fund)
|
Pro forma Combined Fund (VCF and VMM into Acquiring Fund)
|
|
Shareholder Transaction Expenses
|
||||||
Sales Load (as a percentage of offering price)(1)
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Investment Management Fees(2)
|
0.57%
|
0.57%
|
0.58%
|
0.57%
|
0.58%
|
0.58%
|
Other Expenses
|
0.38%
|
0.26%
|
0.44%
|
0.30%
|
0.23%
|
0.22%
|
Interest Expense
|
0.57%
|
0.49%
|
0.64%
|
0.60%
|
0.53%
|
0.54%
|
Total Annual Fund Operating Expenses
|
1.52%
|
1.32%
|
1.66%
|
1.47%
|
1.34%
|
1.34%
|
(1)
|
Common shares are not available for purchase from the Funds but may be purchased on the NYSE American Exchange through a broker-dealer subject to individually negotiated commission
rates. Common shares purchased in the secondary market may be subject to brokerage commissions or other charges. No sales load will be charged in connection with the issuance of Acquiring Fund common shares as part of the
Reorganizations.
|
(2)
|
Each Fund pays DMC an annual fee of 0.40% which is calculated based on each Fund’s adjusted average daily net assets.
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
|
VCF
|
$155
|
$480
|
$829
|
$1,813
|
VMM
|
$134
|
$418
|
$723
|
$1,590
|
Acquiring Fund (VFL)
|
$169
|
$523
|
$902
|
$1,965
|
Pro forma Combined Fund (VCF into VFL)
|
$150
|
$465
|
$803
|
$1,757
|
Pro forma Combined Fund (VMM into VFL)
|
$136
|
$425
|
$734
|
$1,613
|
Pro forma Combined Fund (VCF and VMM into VFL)
|
$136
|
$425
|
$734
|
$1,613
|
Annualized Rates of Return
|
||||||
One Year ended Dec. 31, 2020 based on NAV
|
One Year ended Dec. 31, 2020 based on Market Price
|
Five Year ended Dec. 31, 2020 based on NAV
|
Five Year ended Dec. 31, 2020 based on Market Price
|
Ten Year ended Dec. 31, 2020 based on NAV
|
Ten Year ended Dec. 31, 2020 based on Market Price
|
|
VCF
|
6.23%
|
(0.73)%
|
4.41%
|
4.07%
|
6.15%
|
5.87%
|
VMM
|
4.57%
|
3.09%
|
3.94%
|
3.45%
|
5.36%
|
4.83%
|
Acquiring Fund (VFL)
|
5.44%
|
3.64%
|
4.95%
|
5.23%
|
6.65%
|
6.01%
|
Fund
|
Title of Class
|
Amount Authorized
|
Amount Held by Fund for its Own Account
|
Amount Outstanding Exclusive of Amount Shown in Previous Column
|
VCF
|
MMP
|
300
|
0
|
300
|
VMM
|
MMP
|
750
|
0
|
750
|
Acquiring Fund (VFL)
|
MMP
|
300
|
0
|
300
|
Title of Class
|
Shares Outstanding
|
Liquidation Preference Per Share
|
Aggregate Liquidation Preference
|
Total Assets Managed
|
As Percentage of Net Assets
|
|
VCF
|
MMP
|
300
|
$100,000
|
$30,000,000
|
$103,876,075
|
40.65%
|
VMM
|
MMP
|
750
|
$100,000
|
$75,000,000
|
$246,756,140
|
43.70%
|
VFL
|
MMP
|
300
|
$100,000
|
$30,000,000
|
$97,253,679
|
44.65%
|
Pro forma Combined Fund (VCF into VFL)
|
MMP
|
600
|
$100,000
|
$60,000,000
|
$201,129,754
|
42.56%
|
Pro forma Combined Fund (VMM into VFL)
|
MMP
|
1,050
|
$100,000
|
$105,000,000
|
$344,009,819
|
43.97%
|
Pro forma Combined Fund (VCF and VMM into VFL)
|
MMP
|
1,350
|
$100,000
|
$135,000,000
|
$447,885,894
|
43.18%
|
VCF
|
1.38%
|
VMM
|
1.12%
|
Acquiring FundVFL
|
1.38%
|
Ratios
|
VCF
|
VMM
|
Acquiring Fund (VFL)
|
Pro forma Combined Fund (VCF into VFL)
|
Pro forma Combined Fund (VMM into VFL)
|
Pro forma Combined Fund (VCF and VMM into VFL)
|
Asset Coverage Ratio
|
346%
|
329%
|
324%
|
335%
|
328%
|
322%
|
Regulatory/Effective Leverage Ratio
|
28.88%
|
30.39%
|
30.85%
|
29.83%
|
30.52%
|
30.14%
|
•
|
There will be a reduction in municipal closed-end fund offerings, which will create focus on the most marketable product, the Acquiring Fund.
|
•
|
Each Acquired Fund and the Acquiring Fund share similar investment objectives, strategies and risks, and fundamental investment restrictions. The Acquiring Fund’s investment objective and strategy will be familiar to shareholders as
they are substantially similar to those of the Acquired Funds and will only change from single state to a national mandate.
|
•
|
Each Acquired Fund and the Acquiring Fund have the same portfolio management teams and a degree of portfolio characteristics overlap (such as average maturity), which should minimize transaction costs due to the Reorganization.
|
•
|
Each Acquired Fund’s management fee will remain the same following the Reorganization. However, the common shareholders of VMM are expected to experience a higher total expense ratio in the combined Acquiring Fund. Management
believes that VMM common shareholders will not be concerned regarding the increase in total expense ratio because of the potential for a higher dividend, greater liquidity, broader investment mandate, and investors’ greater focus on
trading price rather than NAV.
|
•
|
The Acquiring Fund’s assets will increase as a result of the Reorganization. With a larger asset level, the Acquiring Fund may achieve greater trading volume and offer greater liquidity to investors which potentially may result in a
lower discount to NAV.
|
•
|
The Reorganizations may result in potential for improved secondary market trading of the common shares of the Acquiring Fund.
|
•
|
The Reorganization will be effected on the basis of each Fund’s net asset value per share and will not result in the dilution of the interests of shareholders of any Fund.
|
•
|
The costs of the Reorganization will be borne one third by the Acquiring Fund, one third divided equally by the Acquired Funds, and one third by DMC.
|
•
|
Each Reorganization will be effected on a tax-free basis.
|
•
|
Larger Net Asset Level - With a larger asset level, the Acquiring Fund may attract a larger set of investors through its national investment strategy, achieve greater trading volume,
and offer greater liquidity to investors, which could potentially reduce its discount.
|
•
|
Greater Liquidity - The Acquiring Fund may have a more liquid trading environment and experience larger trading volume that may assist in leading to a smaller and less persistent
discount to net asset value.
|
•
|
Stronger Investment Opportunity - A larger Acquiring Fund will permit greater investment opportunities by allowing portfolio managers to invest in a wider range of bond issuances,
particularly in light of fewer new bond issuances in recent years by the states of Minnesota and Colorado.
|
•
|
Additional Leverage Flexibility - In line with greater investment opportunities, a larger Acquiring Fund may permit the portfolio managers to explore new or additional forms of
leverage including tender option bonds that may be better received by potential underwriters and investors for a larger Fund with a national bond strategy.
|
•
|
Higher Dividends - Management indicated that it believes that shareholders of the Acquired Funds will experience higher dividends in the Acquiring Fund following the Reorganizations.
|
•
|
greater diversification of portfolio investments;
|
•
|
greater investment flexibility and investment options;
|
•
|
the ability to trade portfolio securities in larger positions and more favorable transaction terms; and
|
•
|
improvement in operational efficiency for fund administration, transfer agent, and investment operations with a reduced closed-end fund lineup.
|
Delaware Investments Colorado Municipal Income Fund, Inc. as of
March 31, 2021 |
Delaware Investments National Municipal Income Fund as of
March 31, 2021 |
|
Aggregate Capital Loss Carryovers
|
none
|
none
|
Net Unrealized Appreciation/(Depreciation) on a Tax Basis
|
$6,576,427
|
$6,193,412
|
Net Assets
|
$73,808,085
|
$67,182,490
|
Approximate Annual Limitation for Capital Losses*
|
-
|
n/a
|
Delaware Investments Minnesota Municipal Income Fund II, Inc. as of March 31, 2021
|
Delaware Investments National Municipal Income Fund as of
March 31, 2021 |
|
Aggregate Capital Loss Carryovers
|
none
|
none
|
Net Unrealized Appreciation/(Depreciation) on a Tax Basis
|
$11,337,888
|
$6,193,412
|
Net Assets
|
$171,618,615
|
$67,182,490
|
Approximate Annual Limitation for Capital Losses*
|
n/a
|
-
|
•
|
receive a greater amount of taxable distributions than they would have had if a Reorganization had not occurred if the Combined Fund’s unrealized appreciation as a percentage of net
asset value is greater than the Acquired Fund’s;
|
•
|
receive a lesser amount of taxable distributions than they would have had if a Reorganization had not occurred if the Combined Fund’s unrealized appreciation as a percentage of net
asset value is lesser than the Acquired Fund’s;
|
•
|
receive a greater amount of taxable distributions than they would have had if a Reorganization had not occurred if the Combined Fund’s unrealized depreciation as a percentage of net
asset value is lesser than the Acquired Fund’s; or
|
•
|
receive a lesser amount of taxable distributions than they would have had if a Reorganization had not occurred if the Combined Fund’s unrealized depreciation as a percentage of net
asset value is greater than the Acquired Fund’s.
|
Acquired Fund
|
Unrealized Appreciation or
|
Acquiring Fund
|
Unrealized Appreciation or
|
Approximate Unrealized Appreciation or
|
|
(Depreciation) as a % of NAV
|
|
(Depreciation) as a % of NAV
|
(Depreciation) as a % of NAV on a combined basis
|
Delaware Investments Colorado Municipal Income Fund, Inc. as of
March 31, 2021 |
8.91%
|
Delaware Investments National Municipal Income Fund as of
March 31, 2021 |
9.22%
|
7.71%
|
Delaware Investments Minnesota Municipal Income Fund II, Inc. as of March 31, 2021
|
6.61%
|
Delaware Investments National Municipal Income Fund as of
March 31, 2021 |
9.22%
|
7.71%
|
Acquired Funds/Classes
|
Acquiring Fund/Classes
|
Delaware Investments Colorado Municipal Income Fund, Inc.
|
Delaware Investments National Municipal Income Fund
|
Common Shares
|
Common Shares
|
Muni-MultiMode Preferred Shares, Series 2049*
|
Muni-MultiMode Preferred Shares, Series 2049*, **
|
Delaware Investments Minnesota Municipal Income Fund II, Inc.
|
Delaware Investments National Municipal Income Fund
|
Common Shares
|
Common Shares
|
Muni-MultiMode Preferred Shares, Series 2049*
|
Muni-MultiMode Preferred Shares, Series 2049*, **
|
|
Acquired Fund
|
Acquiring Fund
|
Pro Forma Adjustments to Capitalization1,2
|
Acquiring Fund after Reorganization1
|
(unaudited)
|
(unaudited)
|
(estimated)
(unaudited)
|
||
Net assets (all classes)
|
$75,603,337.67
|
$69,713,879.61
|
$145,317,217.28
|
|
Common shares outstanding
|
4,837,100.00
|
4,528,443.00
|
73,907,782.00
|
9,440,940.57
|
Net asset value per Common share
|
$15.63
|
$15.39
|
$15.39
|
|
Preferred shares outstanding
|
||||
Liquidation preference
|
|
Acquired Fund
|
Acquiring Fund
|
Pro Forma Adjustments to Capitalization1,2
|
Acquiring Fund after Reorganization1
|
(unaudited)
|
(unaudited)
|
(estimated)
(unaudited)
|
|
|
|
|
|
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
Net assets (all classes)
|
$174,782,541.99
|
$69,713,879.61
|
$244,496,421.60
|
|
Common shares outstanding
|
11,504,975.09
|
4,528,443.00
|
(151,528,925)
|
15,885,333.32
|
Net asset value per Common share
|
$15.19
|
$15.39
|
$15.39
|
|
Preferred shares outstanding
|
||||
Liquidation preference
|
|
Acquired Fund (CO)
|
Acquired Fund (MN)
|
Acquiring Fund
|
Pro Forma Adjustments to Capitalization1,2
|
Acquiring Fund after Reorganizations1
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(estimated)
(unaudited)
|
||
Net assets (all classes)
|
$75,603,337.67
|
$174,782,541.99
|
$69,713,879.61
|
$320,099,759.27
|
|
Common shares outstanding
|
4,837,100.00
|
11,504,975.09
|
4,528,443.00
|
(77,621.14)
|
20,797,830.89
|
Net asset value per Common share
|
$15.63
|
$15.19
|
$15.39
|
$15.39
|
|
Preferred shares outstanding
|
|||||
Liquidation preference
|
Fund Name
|
Name and Address of Account
|
Percentage
|
Delaware Investments Minnesota Municipal Income Fund II, Inc.
|
Saba Capital Management, L.P.
405 Lexington Avenue, 58th Floor New York, New York 10174 |
10.00%
|
Delaware Investments National Municipal Income Fund
|
MacKay Shields LLC
1345 Avenue of Americas New York, NY 10105 |
5.66%
|
Fund Name
|
Name and Address of MMP Shareholder
|
Number of Shares Owned
|
Percentage Owned
|
Delaware Investments Colorado Municipal Income Fund, Inc.
|
Toronto Dominion Investments, Inc.
31 W 52ND STREET
NEW YORK, NY 10019
|
300
|
100%
|
Delaware Investments Minnesota Municipal Income Fund II, Inc.
|
Toronto Dominion Investments, Inc.
31 W 52ND STREET
NEW YORK, NY 10019
|
750
|
100%
|
Delaware Investments National Municipal Income Fund
|
Toronto Dominion Investments, Inc.
31 W 52ND STREET
NEW YORK, NY 10019
|
300
|
100%
|
|
Price
|
|
Net Asset Value
|
|
Premium/Discount
|
|||||||||||||||||||
Quarterly Period Ending
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||||||
|
Price
|
|
Net Asset Value
|
|
Premium/Discount
|
||||||||||||||||||
Quarterly Period Ending
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|||||||||||
|
Price
|
|
Net Asset Value
|
|
Premium/Discount
|
||||||||||||||||||
Quarterly Period Ending
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|||||||||||
Name, Address, and Birthdate
|
Position(s) Held with the Funds
|
Length of Time Served
|
Principal Occupation(s) During the Past Five Years
|
Number of Funds in Fund Complex Overseen by Director
|
Other Directorships Held by Director
|
||||
Interested Director
|
|||||||||
Shawn K. Lytle1
100 Independence, 610 Market Street
Philadelphia, PA 19106-2354
February 1970
|
President, Chief Executive Officer, and Director
|
Director since September 2015
President and Chief Executive Officer since August 2015
|
Global Head of Macquarie Investment Management2 (January 2019–Present)
Head of Americas of Macquarie Group (December 2017–Present)
Deputy Global Head of Macquarie Investments Management (2017-2019)
Head of Macquarie Investment Management Americas (2015-2017)
|
154
|
Director — UBS Relationship Funds, SMA Relationship Trust, and UBS Funds (May 2010–April 2015)
|
||||
Independent Directors
|
|||||||||
Jerome D. Abernathy
100 Independence,
610 Market Street
Philadelphia, PA 19106-2354
July 1959
|
Director
|
Since January 2019
|
Managing Member, Stonebook Capital Management, LLC (financial technology: macro factors and databases) (January 1993-Present)
|
154
|
None
|
Thomas L. Bennett
100 Independence,
610 Market Street
Philadelphia, PA 19106-2354
October 1947
|
Chair and Director
|
Director since March 2005
Chair since March 2015
|
Private Investor —
(March 2004–Present)
|
154
|
None
|
Name, Address, and Birthdate
|
Position(s) Held with the Funds
|
Length of Time Served
|
Principal Occupation(s) During the Past Five Years
|
Number of Funds in Fund Complex Overseen by Director
|
Other Directorships Held by Director
|
Ann D. Borowiec
100 Independence,
610 Market Street
Philadelphia, PA 19106-2354
November 1958
|
Director
|
Since March 2015
|
Chief Executive Officer, Private Wealth Management (2011–2013) and Market Manager, New Jersey Private Bank (2005-2011) —
J.P. Morgan Chase & Co.
|
154
|
Director — Banco Santander International (October 2016–December 2019)
Director — Santander Bank, N.A. (December 2016–December 2019)
|
||||
Joseph W. Chow
100 Independence,
610 Market Street
Philadelphia, PA 19106-2354
January 1953
|
Director
|
Since January 2013
|
Private Investor (April 2011–Present)
|
154
|
Director and Audit Committee Member — Hercules Technology Growth Capital, Inc. (July 2004–July 2014)
|
||||
H. Jeffrey Dobbs
100 Independence, 610 Market Street Philadelphia, PA 19106-2354 May 1955
|
Director
|
Since April 2021
|
Global Sector Chairman, Industrial Manufacturing, KPMG LLP (2010-2015)
|
89
|
Director and Audit Committee Member, Ivy Funds (2019-2021)
Director, Valparaiso University (2012-Present)
Director, TechAccel LLC (2015-Present)
(Tech R&D)
Board Member, Kansas City Repertory Theatre (2015-Present)
Board Member, PatientsVoices, Inc. (healthcare) (2018-Present)
Kansas City Campus for Animal Care (2018-Present)
Director, National Association of Manufacturers (2010-2015)
|
Name, Address, and Birthdate
|
Position(s) Held with the Funds
|
Length of Time Served
|
Principal Occupation(s) During the Past Five Years
|
Number of Funds in Fund Complex Overseen by Director
|
Other Directorships Held by Director
|
Director, The Children’s Center (2003-2015)
Director, Metropolitan Affairs Coalition (2003-2015)
Director, Michigan Roundtable for Diversity and Inclusion (2003-2015)
Director, Ivy NextShares (2019)
|
|||||||||
John A. Fry
100 Independence,
610 Market Street
Philadelphia, PA 19106-2354
May 1960
|
Director
|
Since January 2001
|
President — Drexel University (August 2010–Present)
President —
Franklin & Marshall College (July 2002–June 2010)
|
154
|
Director; Compensation Committee and Governance Committee Member — Community Health Systems (May 2004-Present)
Director — Drexel Morgan & Co. (2015-December 2019)
Director, Audit and Compensation Committee Member — vTv Therapeutics Inc. (2017-Present)
Director and Audit Committee Member — FS Credit Real Estate Income Trust, Inc. (2018-Present)
Director and Audit Committee Member— Federal Reserve Bank of Philadelphia (January 2020-Present)
|
||||
Joseph Harroz, Jr. |
Director
|
Since April 2021
|
President (2020-Present), | 89 | Director and |
Name, Address, and Birthdate
|
Position(s) Held with the Funds
|
Length of Time Served
|
Principal Occupation(s) During the Past Five Years
|
Number of Funds in Fund Complex Overseen by Director
|
Other Directorships Held by Director
|
100 Independence, 610 Market Street Philadelphia, PA 19106-2354 January 1967
|
|
Interim President (2019-2020), Vice President (2010-2019) and Dean (2010-2019), College of Law, University of Oklahoma
Managing Member, Harroz Investments, LLC, (commercial enterprises) (1998-2019)
Managing Member, St. Clair, LLC (commercial enterprises) (2019-Present)
|
|
Independent Chairman, Ivy Funds (1998-2021)
Director, OU Medicine, Inc. (2020-Present);
Director and Shareholder, Valliance Bank (2007-Present)
Director, Foundation Healthcare (formerly Graymark HealthCare) (2008-2017)
Director, the Mewbourne Family Support Organization (2006-Present) (non-profit)
Independent Director, LSQ Manager, Inc. (real estate) (2007-2016)
Director, Oklahoma Foundation for Excellence (non-profit) (2008-Present)
Independent Chairman and Director, Waddell & Reed Advisors Funds (WRA Funds) (Independent Chairman: 2015-2018; Director: 1998-2018)
Independent Chairman and Director, Ivy NextShares (2016-
|
Name, Address, and Birthdate
|
Position(s) Held with the Funds
|
Length of Time Served
|
Principal Occupation(s) During the Past Five Years
|
Number of Funds in Fund Complex Overseen by Director
|
Other Directorships Held by Director
|
2019)
|
|||||||||
Sandra A.J. Lawrence
100 Independence, 610 Market Street Philadelphia, PA 19106-2354 September 1957
|
Director
|
Since April 2021
|
Retired; formerly, Chief Administrative Officer, Children’s Mercy Hospitals and Clinics (2016-2019); CFO, Children’s Mercy Hospitals and Clinics (2005-2016)
|
89
|
Director and Governance Committee Member, Ivy Funds (2019-2021)
Director, Hall Family Foundation (1993-Present)
Director, Westar Energy (utility) (2004-2018)
Director, Nelson-Atkins Museum of Art (non-profit) (2007-2020)
Director, Turn the Page KC (non-profit) (2012-2016)
Director, Kansas Metropolitan Business and Healthcare Coalition (non-profit) (2017-2019)
Director, National Association of Corporate Directors (non-profit) (2017-Present)
Director, American Shared Hospital Services (medical device) (2017-Present)
Director, Evergy, Inc., Kansas City Power & Light Company, KCP&L Greater Missouri Operations Company, Westar Energy, Inc. and
|
Name, Address, and Birthdate
|
Position(s) Held with the Funds
|
Length of Time Served
|
Principal Occupation(s) During the Past Five Years
|
Number of Funds in Fund Complex Overseen by Director
|
Other Directorships Held by Director
|
Kansas Gas and Electric Company (related utility companies) (2018-Present)
Director, Stowers (research) (2018)
CoChair, Women Corporate, Directors (director education) (2018-2020)
Director, Ivy NextShares (2019)
|
|||||||||
Frances A. Sevilla-Sacasa
100 Independence,
610 Market Street
Philadelphia, PA 19106-2354
January 1956
|
Director
|
Since September 2011
|
Private Investor (January 2017–Present)
Chief Executive Officer — Banco Itaú International (April 2012–December 2016)
Executive Advisor to Dean (August 2011–March 2012) and Interim Dean (January 2011–July 2011) — University of Miami School of Business Administration
President — U.S. Trust, Bank of America Private Wealth Management (Private Banking) (July 2007–December 2008)
|
154
|
Trust Manager and Audit Committee Chair — Camden Property Trust (August 2011–Present)
Director; Audit and Compensation Committee Member — Callon Petroleum Company (December 2019-Present)
Director; Audit Committee Member — New Senior Investment Group Inc. (January 2021-Present)
Director; Audit Committee Member — Carrizo Oil & Gas, Inc. (March 2018-December 2019)
|
||||
Thomas K. Whitford
100 Independence,
610 Market Street
|
Director
|
Since January 2013
|
Vice Chairman
(2010–April 2013)— PNC Financial Services Group
|
154
|
Director — HSBC North America Holdings Inc. |
Name, Address, and Birthdate
|
Position(s) Held with the Funds
|
Length of Time Served
|
Principal Occupation(s) During the Past Five Years
|
Number of Funds in Fund Complex Overseen by Director
|
Other Directorships Held by Director
|
Philadelphia, PA 19106-2354
March 1956
|
|
|
(December 2013–Present)
Director — HSBC USA Inc. (July 2014–Present)
Director — HSBC Bank USA, National Association (July 2014–March 2017)
Director — HSBC Finance Corporation (December 2013–April 2018)
|
||||||
Christianna Wood
100 Independence,
610 Market Street
Philadelphia, PA 19106-2354
August 1959
|
Director
|
Since January 2019
|
Chief Executive Officer and President — Gore Creek Capital, Ltd. (August 2009–Present)
|
154
|
Director; Finance Committee and Audit Committee Member — H&R Block Corporation (July 2008–Present)
Director; Investments Committee, Capital and Finance Committee and Audit Committee Member — Grange Insurance (2013–Present)
Director; Chair of Nominating and Governance Committee and Member of Audit Committee — The Merger Fund (2013–Present), The Merger Fund VL (2013–Present), WCM Alternatives:
Event-Driven Fund (2013–Present), and WCM Alternatives: Credit Event Fund (December 2017–Present)
|
Name, Address, and Birthdate
|
Position(s) Held with the Funds
|
Length of Time Served
|
Principal Occupation(s) During the Past Five Years
|
Number of Funds in Fund Complex Overseen by Director
|
Other Directorships Held by Director
|
Director; Chair of Governance Committee and Audit Committee Member — International Securities Exchange (2010–2016)
|
|||||||||
Janet L. Yeomans
100 Independence,
610 Market Street
Philadelphia, PA 19106-2354
July 1948
|
Director
|
Since April 1999
|
Vice President and Treasurer
(January 2006–July 2012)
Vice President — Mergers & Acquisitions
(January 2003–January 2006), and Vice President and Treasurer
(July 1995–January 2003) — 3M Company
|
154
|
Director; Personnel and Compensation Committee Chair; Member of Nominating, Investments, and Audit Committees for various periods throughout directorship — Okabena Company
(2009‑2017)
|
Name of Director
|
|
Dollar Range of Equity Securities in each Fund
|
|
Aggregate Dollar Range of Equity Securities1 in All Registered Investment Companies Overseen by Director in Fund Complex2
|
Interested Director
|
||||
Shawn K. Lytle
|
None
|
Over $100,000
|
||
Independent Directors
|
||||
Jerome D. Abernathy
|
None
|
Over $100,000
|
||
Thomas L. Bennett
|
None
|
|
Over $100,000
|
|
Ann D. Borowiec
|
None
|
Over $100,000
|
||
Joseph W. Chow
|
None
|
|
Over $100,000
|
|
H. Jeffrey Dobbs
|
None
|
None
|
||
John A. Fry
|
None
|
Over $100,000
|
||
Joseph Harroz, Jr.
|
None
|
None
|
||
Sandra A.J. Lawrence
|
None
|
None
|
||
Frances A. Sevilla-Sacasa
|
None
|
Over $100,000
|
||
Thomas K. Whitford
|
|
[None]
|
|
Over $100,000
|
Christianna Wood
|
None
|
Over $100,000
|
||
Janet L. Yeomans
|
|
None
|
|
Over $100,000
|
Director
|
Aggregate Compensation from the Funds
|
|
Total Compensation from the Investment Companies in the Fund Complex*
|
Number of Funds in Fund Complex* Overseen by Director as of April 30, 2021
|
||
Jerome D. Abernathy
|
$1,737
|
$353,333
|
77
|
|||
Thomas L. Bennett (Chair)
|
$2,286
|
$465,833
|
77
|
|||
Ann D. Borowiec
|
$1,643
|
$334,333
|
77
|
|||
Joseph W. Chow
|
$1,598
|
$326,333
|
77
|
|||
H. Jeffrey Dobbs
|
$0
|
$0
|
0
|
|||
John A. Fry
|
$1,617
|
$329,833
|
77
|
|||
Lucinda S. Landreth**
|
$1,221
|
$242,333
|
77
|
|||
Joseph Harroz, Jr.
|
$0
|
$0
|
0
|
|||
Sandra A.J. Lawrence
|
$0
|
$0
|
0
|
|||
Frances A. Sevilla-Sacasa
|
$1,721
|
$350,833
|
77
|
|||
Thomas K. Whitford
|
$1,795
|
$365,333
|
77
|
|||
Christianna Wood
|
$1,737
|
$353,333
|
77
|
|||
Janet L. Yeomans
|
$1,675
|
$340,833
|
77
|
Fund and Title of Class
|
Amount Authorized
|
Amount Held by Fund for its Own Account
|
Amount Outstanding Exclusive of Amount Shown in Previous Column
|
VCF
|
|||
Common Shares
|
4,837,100.0000
|
||
Preferred Shares
|
300.0000
|
||
VFL
|
Common Shares
|
4,528,443.5053
|
||
Preferred Shares
|
300.0000
|
||
VMM
|
|||
Common Shares
|
11,504,975.0860
|
||
Preferred Shares
|
750.0000
|
•
|
Fund Administration: Delaware Investments Fund Services Company (DIFSC), located at 100 Independence, 610 Market Street, Philadelphia, PA 19106-2354, an affiliate of DMC, provides fund
accounting and financial administration oversight services to each Fund.
|
•
|
Transfer Agent: Computershare, Inc., located at 480 Washington Blvd., Jersey City, NJ, 07310, serves as the Funds’ registrar and stock transfer agent (the Transfer Agent).
|
•
|
Tender and Paying Agent for the MMP shares: The Bank of New York Mellon (BNY Mellon), 240 Greenwich Street, New York, NY 10286-0001, serves as the Funds’ tender agent, transfer agent,
registrar, dividend disbursing agent, paying agent, redemption price disbursing agent and calculation agent in connection with the payment of regularly scheduled dividends with respect to the MMP shares.
|
•
|
Fund Accountants: BNY Mellon, provides fund accounting and financial administration services to the Funds. Those services include providing financial reporting information, regulatory
compliance testing, and other related accounting services.
|
•
|
Custodian: BNY Mellon is each Fund’s custodian.
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•
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Legal Counsel: Stradley Ronon Stevens & Young, LLP serves as the Funds’ legal counsel.
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•
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Independent Registered Public Accountants: PricewaterhouseCoopers LLP serves as the independent registered public accounting firm for each Fund.
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A |
Form of Agreement and Plan of Acquisition
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B |
Financial Highlights
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1.
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Sale and Transfer of Assets, Liquidation and Dissolution of the Acquired Fund
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(a)
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Subject to the terms and conditions of this Plan, and in reliance on the representations and warranties of Acquiring Fund herein contained, and in consideration
of the delivery by Acquiring Fund of the number of Acquiring Fund Shares hereinafter provided, the Acquired Fund agrees that it will convey, transfer and deliver to Acquiring Fund at the Closing all of the Acquired Fund’s then existing
assets, free and clear of all liens, encumbrances and claims whatsoever
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(other than shareholders’ rights of redemption, if any), except for cash, bank deposits or cash equivalent securities in an estimated amount necessary to: (i)
pay the costs and expenses of carrying out this Plan as mutually agreed upon by the parties (including, but not limited to, fees of counsel and accountants, and expenses of its liquidation and dissolution contemplated hereunder), which
costs and expenses shall be established on the Acquired Fund’s books as liability reserves; (ii) discharge its unpaid liabilities on its books as of the close of business on the day immediately preceding the Closing date (as defined in
Section 3, hereinafter called the “Closing Date”), including, but not limited to, its income dividends and capital gains distributions, if any, payable for the period prior to, and through, the Closing Date and excluding those
liabilities that would otherwise be discharged at a later date in the ordinary course of business; and (iii) pay such contingent liabilities as the Board of Directors of the Acquired Fund (the “Acquired Fund Board”) shall reasonably
deem to exist against the Acquired Fund, if any, as of the close of business on the date immediately preceding the Closing Date, for which contingent and other appropriate liability reserves shall be established on the Acquired Fund’s
books (hereinafter “Net Assets”). The Acquired Fund shall also retain any and all rights that it may have over and against any person that may have arisen up to and including the close of business on the day immediately preceding the
Closing Date.
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(b)
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Subject to the terms and conditions of this Plan, and in reliance on the representations and warranties of the Acquired Fund herein contained, and in
consideration of such sale, conveyance, transfer and delivery, Acquiring Fund agrees at the Closing to deliver to the Acquired Fund (i) the number of Acquiring Fund Common Shares determined with respect to the Acquired Fund by: (A)
dividing the net asset value per share of the common stock of the Acquired Fund (“Acquired Fund Common Shares”) by (B) the net asset value per share of Acquiring Fund Common Shares, and (C) multiplying the resulting quotient by the
number of outstanding Acquired Fund Common Shares; and (ii) [300/750] shares of Acquiring Fund Preferred Shares, the aggregate liquidation preference of which shall equal the aggregate liquidation preference of the preferred shares of
the Acquired Fund (“Acquired Fund Preferred Shares” and together with the Acquired Fund Common Shares, the “Acquired Fund Shares”). All such values of the Acquired Fund Common Shares and the Acquiring Fund Common Shares and the
aggregate liquidation preference of the Acquired Fund Preferred Shares and the Acquiring Fund Preferred Shares shall be determined in the manner and as of the time set forth in Section 2 hereof. The preferences, voting powers,
restrictions, limitations as to dividends, qualifications and terms and conditions of redemption of the Acquiring Fund Preferred Shares shall be identical in all material respects to those of the Acquired Fund Preferred Shares.
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(c)
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Liquidating Distribution
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(1)
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As promptly as is reasonably practicable after the Closing, the Acquired Fund shall liquidate and distribute the Acquiring Fund Shares received by the Acquired
Fund pursuant to this Section 1, together with any other
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assets, (i) pro rata to the Acquired Fund’s common shareholders of record as of the close of business on the valuation date (as defined in Section 2,
hereinafter called the “Valuation Date”), the Acquiring Fund Common Shares received by the Acquired Fund pursuant to this Section 1; and (ii) to shareholders of Acquired Fund Preferred Shares of record, determined as of the Valuation
Date, one share of Acquiring Fund Preferred Shares, in exchange for each share of Acquired Fund Preferred Shares held by the preferred shareholders of the Acquired Fund.
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(2)
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Such liquidating distribution will be accomplished (i) by opening accounts on the books of the Acquiring Fund in the names of the shareholders of the Acquired
Fund and transferring to each account (A) in the case of a common shareholder, such shareholder’s pro rata share of the Acquiring Fund Common Shares received by the Acquired Fund, and (B) in the case of a preferred shareholder, a number
of the shares of Acquiring Fund Preferred Shares received by the Acquired Fund equal to the number of shares of Acquired Fund Preferred Shares held by such shareholder, and (ii) by paying to the shareholders of the Acquired Fund any
Interim Dividends on such transferred shares.
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(3)
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Fractional Acquiring Fund Common Shares shall be carried to the third decimal place.
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(d)
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The Closing Date shall be designated a special dividend payment date in respect of the Acquired Fund Preferred Shares pursuant to an Acquired Fund notice for
the payment of all accumulated but unpaid dividends thereon to, but excluding, such special dividend payment date, such dividends to be payable out of amounts legally available therefor on such special dividend payment date to
shareholders of the Acquired Fund at the close of business on the Valuation Date (or, if such day is not a business day, the next preceding business day), in such amount as will be determined in accordance with the Acquired Fund notice
at the dividend rate(s) for the dividend period with respect to which such dividends are declared.
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(e)
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At the Closing, any outstanding certificates representing shares of the Acquired Fund will be cancelled. The Acquiring Fund shall not issue certificates
representing shares in connection with such exchange, irrespective of whether Acquired Fund Shareholders hold their Acquired Fund Shares in certificated form. Ownership of Acquiring Fund Shares will be shown on its books, as such are
maintained by the Acquiring Fund’s transfer agent. Immediately after the Closing Time, the share transfer books relating to the Acquired Fund shall be closed and no transfer of shares shall thereafter be made on such books.
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(f)
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As promptly as practicable after the Closing Date and the liquidating distribution of the respective Acquiring Fund Shares (and any resolution of litigation or
other contingent liabilities), the Acquired Fund shall be dissolved.
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2.
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Valuation
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(a)
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The value of the Acquired Fund’s Net Assets to be acquired by Acquiring Fund hereunder shall be computed as of immediately after the close of regular trading on
the New York Stock Exchange on the business day immediately preceding the Closing Date (the “Valuation Date”) in a manner consistent with the valuation procedures adopted by the Acquired Fund. The value of the Acquired Fund’s net
assets shall be calculated net of the liquidation preference (including accumulated and unpaid dividends) of all outstanding shares of Acquired Fund Preferred Shares.
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(b)
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The value of Acquiring Fund’s Net Assets shall be computed as of the Valuation Date in a manner consistent with the valuation procedures adopted by the
Acquiring Fund. The value of the Acquiring Fund’s net assets shall be calculated net of the liquidation preference (including accumulated and unpaid dividends) of all outstanding shares of Acquiring Fund Preferred Shares.
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(c)
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The respective net asset value per Acquired Fund Common Share of the Acquired Fund shall be determined to the third decimal place as of the Valuation Date in a
manner consistent with the valuation procedures adopted by the Acquired Fund.
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(d)
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The net asset value per Acquiring Fund Common Shares shall be determined to the third decimal place as of the Valuation Date Date in a manner consistent with
the valuation procedures adopted by the Acquiring Fund.
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(e)
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The liquidation preference of the Acquired Fund Preferred Shares is $100,000 per share.
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(f)
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The liquidation preference of the Acquiring Fund Preferred Shares is $100,000 per share.
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3.
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Closing Date
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4.
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Representations and Warranties by Acquiring Fund
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(a)
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Acquiring Fund is a business trust formed under the laws of the State of Massachusetts and is validly existing under the laws of that State. Acquiring Fund is
duly registered under the 1940 Act as a closed-end, management investment company and all of the Acquiring Fund Shares sold were sold pursuant to an effective registration statement filed under the Securities Act of 1933, as amended
(the “1933 Act”), except for those shares sold pursuant to the private offering exemption for the purpose of raising the required initial capital.
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(b)
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Acquiring Fund is authorized to issue an unlimited number of Acquiring Fund Shares, with par value of $0.01. As of March 31, 2021, the Acquiring Fund had
issued and outstanding [4,528,443] shares of Acquiring Fund Common Shares listed on the NYSE American Exchange and [300] shares of Series 2049 Muni-MultiMode Preferred Shares issued and outstanding. All issued and outstanding Acquiring Fund Common Shares and Series 2049 Muni-MultiMode Preferred Shares are, and all
Acquiring Fund Common Shares and Acquiring Fund Preferred Shares to be issued in exchange for Net Assets of the Acquired Fund pursuant to this Plan will be when so issued, duly and validly issued and outstanding, fully paid,
non-assessable and have full voting rights.
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(c)
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The audited financial statements appearing in Acquiring Fund’s Annual Report to Shareholders for the fiscal year ended March 31, 2021, audited by
PricewaterhouseCoopers LLP, a copy of which has been delivered to the Acquired Fund, fairly present the financial position of Acquiring Fund as of the respective dates indicated and the results of its operations for the periods
indicated in conformity with generally accepted accounting principles applied on a consistent basis.
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(d)
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The books and records of Acquiring Fund accurately summarize the accounting data represented and contain no material omissions with respect to the business and
operations of Acquiring Fund.
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(e)
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Acquiring Fund has the necessary power and authority to conduct its business as such business is now being conducted.
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(f)
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Acquiring Fund is not a party to or obligated under any provision of its Declaration of Trust or its By-laws (together, as each has been amended to date, the
“Acquiring Fund Corporate Documents”), or any contract or any other commitment or obligation, and is not subject to any order or decree, that would be violated by its execution of or performance under this Plan.
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(g)
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Acquiring Fund has elected to be treated as a regulated investment company (“RIC”) for federal income tax purposes under Part I of Subchapter M of the Internal
Revenue Code of 1986, as amended (the “Code”), and it has qualified as a RIC for each taxable year since its inception and will qualify as a RIC as of the
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Closing Date, and consummation of the transactions contemplated by this Plan will not cause it to fail to be qualified as a RIC as of the Closing Date.
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(h)
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Acquiring Fund is not under jurisdiction of a Court in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
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(i)
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At the time of effectiveness of the registration statement filed by the Acquiring Fund with the SEC on Form N-14 under the 1933 Act relating to Acquiring Fund
Shares issuable hereunder (the “Acquiring Fund N‑14 Registration Statement”) and the filing of a definitive proxy statement relating to the Acquiring Fund Preferred Shares to be issued to shareholders of the Acquired Fund Preferred
Shares (the “Preferred Shares Proxy Statement”), each of the Acquiring Fund N-14 Registration Statement and the Preferred Shares Proxy Statement will (i) comply in all material respects with the applicable provisions of the 1933 Act,
1940 Act, Securities Exchange Act of 1934, as amended (the “1934 Act”), and the rules and regulations promulgated thereunder; and (ii) not contain any untrue statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any disclosure in the Acquiring Fund N-14 Registration Statement or Preferred Shares
Proxy Statement provided by the Acquired Fund.
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(j)
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At the time the Acquiring Fund N-14 Registration Statement becomes effective, at the time of the filing of the definitive Preferred Shares Proxy Statement, at
the time of the Acquiring and Acquired Funds’ shareholders’ meeting to consider this Plan (the “Meeting”), and at the Closing Date, the Proxy Statement/Prospectus and Statement of Additional Information included in the Acquiring Fund
N-14 Registration Statement and the Preferred Shares Proxy Statement will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any disclosure in the Acquiring Fund N-14 Registration Statement or the Preferred Shares Proxy Statement provided by
the Acquired Fund.
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5.
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Representations and Warranties by the Acquired Fund
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(a)
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The Acquired Fund is a corporation incorporated under the laws of the State of Minnesota and is validly existing under the laws of that State. The Acquired
Fund is duly registered under the 1940 Act as a closed-end management investment company and all of the Acquired Fund’s Acquired Fund Shares sold were sold in compliance in all material respects with applicable registration requirements
of the 1933 Act.
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(b)
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The authorized capital of the Acquired Fund consists of 201,000,000 shares consisting of 200,00,000 shares of common stock, par value $0.01 per share, and
1,000,000 shares of preferred stock, par value $0.01. As of March 31, 2021, the Acquired Fund had issued and outstanding [4,837,100/11,504,975] shares of
Acquired Fund Common Shares listed on the NYSE American Exchange and [300/750] shares of Series 2049 Muni-MultiMode Preferred Shares issued and
outstanding. All issued and outstanding Acquired Fund Shares are fully paid, non-assessable and have full voting rights.
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(c)
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The audited financial statements appearing in the Acquired Fund’s Annual Report to Shareholders for the fiscal year ended March 31, 2021, audited by
PricewaterhouseCoopers LLP, a copy of which has been delivered to Acquiring Fund, fairly present the financial position of the Acquired Fund as of the respective dates indicated and the results of its operations for the periods
indicated in conformity with generally accepted accounting principles applied on a consistent basis.
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(d)
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The books and records of the Acquired Fund accurately summarize the accounting data represented and contain no material omissions with respect to the business
and operations of the Acquired Fund.
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(e)
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The Acquired Fund has the necessary power and authority to conduct its business as such business is now being conducted.
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(f)
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The Acquired Fund is not a party to or obligated under any provision of its respective Articles of Incorporation, as amended or supplemented from time to time,
or its respective Bylaws (together, the “the Acquired Fund Corporate Documents”), or any contract or any other commitment or obligation, and is not subject to any order or decree, that would be violated by its execution of or
performance under this Plan.
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(g)
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The Acquired Fund has elected to be treated as a RIC for federal income tax purposes under Part I of Subchapter M of the Code, and it has qualified as a RIC for
each taxable year since its inception and will qualify as a RIC as of the Closing Date, and consummation of the transactions contemplated by this Plan will not cause it to fail to be qualified as a RIC as of the Closing Date.
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(h)
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The Acquired Fund is not under jurisdiction of a Court in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
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(i)
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At the time of effectiveness of the Acquiring Fund N‑14 Registration Statement and the filing of the definitive Preferred Shares Proxy Statement, each of the
Acquiring Fund N-14 Registration Statement and Preferred Shares Proxy Statement will not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and warranty shall not apply to any disclosure in the Acquiring Fund N-14 Registration
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Statement or Preferred Shares Proxy Statement not provided by the Acquired Fund.
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(j)
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At the time the Acquiring Fund N-14 Registration Statement becomes effective and the filing of the definitive Preferred Shares Proxy Statement, at the time of
the Meeting, and at the Closing Date, the Proxy Statement/Prospectus and Statement of Additional Information included in the Acquiring Fund N-14 Registration Statement and the Preferred Shares Proxy Statement will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and
warranty shall not apply to any disclosure in the Acquiring Fund N-14 Registration Statement or Preferred Shares Proxy Statement provided by the Acquired Fund.
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6.
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Representations and Warranties by Acquired Fund and Acquiring Fund
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(a)
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The unaudited statement of assets and liabilities to be furnished by each party as of 4:00 p.m. Eastern time on the Valuation Date, for the purpose of
determining the number of Acquiring Fund Common Shares to be issued pursuant to Section 1 of this Plan, will accurately reflect the Net Assets in the case of the Acquired Fund and the net assets in the case of Acquiring Fund, and the
outstanding Acquired Fund Common Shares of the Acquired Fund and Acquiring Fund Shares, respectively, as of such date, in conformity with generally accepted accounting principles applied on a consistent basis.
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(b)
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At the Closing, it will have good and marketable title to all of the securities and other assets shown on the statement of assets and liabilities referred to in
(a) above, free and clear of all liens or encumbrances of any nature whatsoever, except such imperfections of title or encumbrances as do not materially detract from the value or use of the assets subject thereto, or materially affect
title thereto.
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(c)
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Except as has been previously disclosed in any annual or semi-annual reports sent to shareholders pursuant to Section 30 of the 1940 Act or press releases
issued by or on behalf of the Acquiring Fund or Acquired Fund (the “Acquiring Fund Disclosure Documents” and “Acquired Fund Disclosure Documents,” respectively), there is no material suit, judicial action, or legal or administrative
proceeding pending or threatened against the Acquired Fund or Acquiring Fund, respectively.
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(d)
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There are no known actual or proposed deficiency assessments with respect to any taxes payable by it.
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(e)
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The execution, delivery and performance of this Plan have been duly authorized by all necessary action of the Board of Trustees of Acquiring Fund (the
“Acquiring Fund Board”) or the Acquired Fund Board, respectively, and this Plan
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constitutes a valid and binding obligation enforceable in accordance with its terms.
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(f)
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It anticipates that the consummation of this Plan will not cause either the Acquired Fund or Acquiring Fund to fail to conform to the requirements of Subchapter
M of the Code for federal income taxation as a RIC at the end of its fiscal year.
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(g)
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It has the necessary power and authority to conduct its business as such business is now being conducted.
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7.
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Covenants of the Acquired Fund and Acquiring Fund
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(a)
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The Acquired Fund and the Acquiring Fund each covenants to (i) operate its business in the ordinary course and substantially in accordance with past practices
between the date hereof and the Closing Date, it being understood that such ordinary course of business may include the declaration and payment of customary dividends and distributions, and any other distribution that may be advisable,
and (ii) use its reasonable best efforts to preserve intact its business organization and material assets and maintain the rights, franchises and business and customer relations necessary to conduct the business operations of the
Acquired Fund and the Acquiring Fund, as appropriate, in the ordinary course in all material respects.
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(b)
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The Acquired Fund undertakes that it will not acquire Acquiring Fund Shares for the purpose of making distributions thereof to anyone other than the respective
shareholders of the Acquired Fund.
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(c)
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The Acquired Fund undertakes that, if this Plan is consummated, it will dissolve its corporate existence, file an application pursuant to Section 8(f) of the
1940 Act for an order declaring that it has ceased to be an investment company and take the necessary actions, including making the necessary filings, to withdraw its shares from listing on those stock exchanges on which the Acquired
Fund Shares of the Acquired Fund are listed as of the Closing Date.
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(d)
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The Acquired Fund and the Acquiring Fund each agrees that, by the Closing Date, all documents and reports required by law to be filed on or before such date
shall have been filed with (i) any federal, state or local tax authorities, including any tax returns, (ii) the U.S. Securities and Exchange Commission (the “SEC”) or any state securities commission, and (iii) or any other relevant
regulatory authority, and all federal and other taxes shown as due on said returns shall have either been paid or had adequate liability reserves created for the payment of such taxes.
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(e)
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At the Closing, the Acquired Fund will provide Acquiring Fund a copy of the shareholder ledger accounts, certified by the Acquired Fund’s transfer agent or its
President or a Vice President to the best of its or his or her knowledge and belief, for all of the shareholders of record of the Acquired Fund’s respective Acquired Fund Shares as of 4:00 p.m. Eastern time on the Valuation Date who are
to
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become shareholders of Acquiring Fund as a result of the transfer of assets that is the subject of this Plan.
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(f)
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The Acquired Fund agrees to mail to its shareholders of record entitled to vote at the Meeting, in sufficient time to comply with requirements as to notice
thereof, a combined Prospectus and Proxy Statement and, as applicable, a Preferred Shares Proxy Statement that complies in all material respects with the applicable provisions of Section 14(a) of the 1934 Act and Section 20(a) of the
1940 Act, and the rules and regulations, respectively, thereunder, to call a meeting of such shareholders and to take all other action necessary to obtain approval of the transactions contemplated herein.
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(g)
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Acquiring Fund will file with the SEC the Acquiring Fund N‑14 Registration Statement containing the combined Prospectus and Proxy Statement and will use its
best efforts to provide that the Acquiring Fund N-14 Registration Statement becomes effective as promptly as is practicable. The Funds also will file with the SEC one or more Preferred Shares Proxy Statements relating to the Acquiring
Fund Preferred Shares to be issued to shareholders of the Acquired Fund Preferred Shares.
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(h)
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Subject to the provisions of this Agreement, each Fund will each take, or cause to be taken, all action, and do or cause to be done all things, reasonably
necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement.
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(i)
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It is the intention of the parties that the Acquisition will qualify as a reorganization with the meaning of Section 368(a)(1)(A) of the Code. None of the
parties to the Acquisition shall take any action or cause any action to be taken (including, without limitation the filing of any tax Return) that is inconsistent with such treatment or results in the failure of such Acquisition to
qualify as a reorganization within the meaning of Section 368(a)(1)(A) of the Code.
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(j)
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Each Fund shall use its reasonable best efforts to cause the Acquiring Fund Common Shares to be issued in the Acquisition to be approved for listing on each of
the stock exchanges on which the Acquiring Fund Common Shares are listed.
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(k)
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The Acquiring Fund shall use its reasonable best efforts to obtain a rating on the Acquiring Fund Preferred Shares from at least one nationally recognized
statistical rating organization (“NRSRO”) and include in its governing documents terms relating to the Acquiring Fund Preferred Shares that are either substantially the same as such terms included in the governing documents of the
Acquired Fund in respect of the Acquired Fund Preferred Shares or substantially the same as such terms included in the Acquired Fund governing documents except for such changes as required by any NRSRO rating the Acquiring Fund
Preferred Shares, prior to the Closing.
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(l)
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The combined Acquired Fund and Acquiring Fund will satisfy all of its obligations set forth in the Acquiring Fund’s Agreement and Declaration of Trust,
statement of preferences of the Acquiring Fund Preferred Shares, registration rights agreement relating to the Acquiring Fund Preferred Shares, if any, and the Acquiring Fund Preferred Shares certificate (including, without limitation,
satisfaction of the effective leverage ratio and minimum asset coverage covenants set forth in its statement of preferences) immediately after Closing.
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(m)
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Immediately after closing, the Acquiring Fund Preferred Shares shall be rated at least AA by Fitch Ratings, Inc., at the request of the Acquiring Fund.
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8.
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Conditions Precedent to be Fulfilled by the Acquired Fund and Acquiring Fund
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(a)
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That: (i) all the representations and warranties of each party contained herein shall be true and correct as of the Closing with the same effect as though made
as of and at such date; (ii) each party shall have performed all obligations required by this Plan to be performed by it prior to the Closing; and (iii) the Acquired Fund and Acquiring Fund shall have delivered to the other a
certificate signed by its President, a Vice President or an equivalent officer to the foregoing effect.
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(b)
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That the Acquired Fund and Acquiring Fund shall have delivered to the other a copy of the resolutions approving the Plan adopted and approved by the appropriate
action of the Acquired Fund Board or Acquiring Fund Board, as appropriate, certified by its President, a Vice President or an equivalent officer of the Acquired Fund or Acquiring Fund, respectively.
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(c)
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That the SEC shall not have issued an unfavorable management report under Section 25(b) of the 1940 Act or instituted or threatened to institute any proceeding
seeking to enjoin consummation of the Plan under Section 25(c) of the 1940 Act. And, further, no other legal, administrative or other proceeding shall have been instituted or threatened that would materially affect the financial
condition of either party or would prohibit the transactions contemplated hereby.
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(d)
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That this Plan and the Acquisition contemplated hereby shall have been adopted and approved by the appropriate action of the shareholders of the Acquired Fund
at an annual or special meeting or any adjournment thereof.
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(e)
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The Acquired Fund shall have declared and paid or cause to be paid a distribution or distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all of Acquired Fund’s investment company taxable income for the taxable year ended prior to the Closing Date and substantially all of such investment company
taxable income for the final taxable year ending on the Closing Date (in each case determined without regard to any deductions for dividends paid); (ii) all of Acquired Fund’s net capital gain recognized in its taxable year ended prior
to the Closing Date and
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substantially all of any such net capital gain recognized in such final taxable year (in each case after reduction for any capital loss carryover); and (iii) at
least 90 percent of the excess, if any, of the Acquired Fund’s interest income excludible from gross income under Section 103(a) of the Code over its deductions disallowed under Sections 265 and 171(a)(2) of the Code for the taxable
year prior to the Closing Date and at least 90 percent of such net tax-exempt income for such final taxable year.
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(f)
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That there shall be delivered to the Acquired Fund and Acquiring Fund an opinion from Stradley Ronon Stevens & Young, LLP, counsel to the Acquired Fund and
Acquiring Fund, to the effect that, provided the acquisition contemplated hereby is carried out in accordance with this Plan and the laws of the State of Massachusetts, and based upon certificates of the officers of the Acquired Fund
and Acquiring Fund with regard to matters of fact:
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(1)
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The acquisition by Acquiring Fund of substantially all the assets of the Acquired Fund as provided for herein in exchange for the respective Acquiring Fund
Shares followed by the distribution by the Acquired Fund to its shareholders of such Acquiring Fund Shares in complete liquidation of the Acquired Fund will qualify as a reorganization within the meaning of Section 368(a)(1) of the
Code, and the Acquired Fund and Acquiring Fund will each be a “party to the reorganization” within the meaning of Section 368(b) of the Code;
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(2)
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No gain or loss will be recognized by the Acquired Fund upon the transfer of substantially all of its respective assets to Acquiring Fund in exchange solely for
voting shares of Acquiring Fund (Sections 361(a) and 357(a) of the Code);
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(3)
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No gain or loss will be recognized by Acquiring Fund upon the receipt of substantially all of the respective assets of the Acquired Fund in exchange solely for
voting shares of Acquiring Fund (Section 1032(a) of the Code);
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(4)
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No gain or loss will be recognized by the Acquired Fund upon the distribution of Acquiring Fund Shares to its respective shareholders in liquidation of the
Acquired Fund (in pursuance of the Plan) (Section 361(c)(1) of the Code);
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(5)
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The basis of the assets of the Acquired Fund received by Acquiring Fund will be the same as the basis of such assets to the Acquired Fund immediately prior to
the Acquisition (Section 362(b) of the Code);
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(6)
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The holding period of the assets of the Acquired Fund received by Acquiring Fund will include the period during which such assets were held by the Acquired Fund
(Section 1223(2) of the Code);
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(7)
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No gain or loss will be recognized to the respective shareholders of the Acquired Fund upon the exchange of their shares in the Acquired Fund for
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voting shares of Acquiring Fund, including fractional shares to which they may be entitled (Section 354(a)(1) of the Code);
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(8)
|
The basis of Acquiring Fund Shares received by the respective shareholders of the Acquired Fund shall be the same as the basis of the Acquired Fund Shares
exchanged therefor (Section 358(a)(1) of the Code);
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(9)
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The holding period of Acquiring Fund Shares received by the respective shareholders of the Acquired Fund (including fractional shares to which they may be
entitled) will include the holding period of the Acquired Fund Shares surrendered in exchange therefor, provided that the Acquired Fund Shares were held as a capital asset on the effective date of the exchange (Section 1223(1) of the
Code); and
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(10)
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Acquiring Fund will succeed to and take into account as of the date of the transfer (as defined in Section 1.381(b)-1(b) of the regulations issued by the United
States Treasury (“Treasury Regulations”)) the items of the Acquired Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code and the Treasury
Regulations.
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(g)
|
That there shall be delivered to Acquiring Fund an opinion in form and substance satisfactory to it from Stradley Ronon Stevens & Young, LLP, counsel to the
Acquired Fund, to the effect that, subject in all respects to the effects of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws now or hereafter affecting generally the enforcement of creditors’
rights:
|
(1)
|
The Acquired Fund is a corporation incorporated under the laws of the State of Minnesota and is a validly existing corporation and in good standing under the
laws of that state;
|
(2)
|
The authorized capital of the Acquired Fund consists of 201,000,000 shares consisting of 200,000,000 shares of common stock, par value $0.01 per share, and
1,000,000 shares of preferred stock, par value $0.01, of which [300/750] shares have been designated as Series 2049 Muni-MultiMode Preferred Shares. Assuming that the initial shares of common stock of the Acquired Fund were issued in
accordance with the 1940 Act and the Acquired Fund Corporate Documents, and that all other
|
outstanding shares of the Acquired Fund were sold, issued and paid for in compliance in all material respects with applicable registration requirements of the
1933 Act, each such outstanding share is fully paid, non-assessable, freely transferable and has full voting rights in accordance with the terms of the Acquired Fund Corporate Documents;
|
(3)
|
The Acquired Fund is a closed-end investment company of the management type registered as such under the 1940 Act;
|
(4)
|
Except as disclosed in the Acquired Fund Disclosure Documents, such counsel does not know of any material suit, action or legal or administrative proceeding
pending or threatened against the Acquired Fund, the unfavorable outcome of which would materially and adversely affect the Acquired Fund;
|
(5)
|
All corporate actions required to be taken by the Acquired Fund to authorize this Plan and to effect the Acquisition contemplated hereby have been duly
authorized by all necessary action on the part of the Acquired Fund; and
|
(6)
|
The execution, delivery or performance of this Plan by the Acquired Fund will not violate any provision of the Acquired Fund’s Acquired Fund Corporate
Documents, or the provisions of any agreement or other instrument known to such counsel to which the Acquired Fund is a party or by which the Acquired Fund is otherwise bound; this Plan is the legal, valid and binding obligation of the
Acquired Fund and is enforceable against the Acquired Fund in accordance with its terms.
|
(7)
|
To the best knowledge of such counsel, at the time of the filing of the definitive Preferred Shares Proxy Statement or at the Closing, nothing has come to
counsel’s attention that causes it to believe that such Preferred Shares Proxy Statement contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and such counsel knows of no legal or government proceedings required to be described in the Preferred Shares Proxy Statement, or of any contract or document of a character required to be described in
the Preferred Shares Proxy Statement that is not described as required.
|
(h)
|
That there shall be delivered to the Acquired Fund an opinion in form and substance satisfactory to it from Stradley Ronon Stevens & Young, LLP, counsel
|
to Acquiring Fund, to the effect that, subject in all respects to the effects of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other laws now or hereafter affecting generally the enforcement of creditors’ rights:
|
(1)
|
Acquiring Fund is a business trust formed under the laws of the State of Massachusetts and is a validly existing business trust and in good standing under the
laws of that State;
|
(2)
|
Acquiring Fund is authorized to issue an unlimited number of Acquiring Fund Shares with par no value. As of March 31, 2021, the Acquiring Fund had issued and
outstanding [4,528,443] shares of Acquiring Fund Common Shares listed on the NYSE American Exchange and [300] shares of Series 2049 Muni-MultiMode Preferred Shares issued and outstanding. Assuming that the initial Acquiring Fund Common Shares were issued in accordance in all material respects with the 1940
Act and the Acquiring Fund Corporate Documents, and that all other outstanding Acquiring Fund Shares were sold, issued and paid for in accordance in all material respects with the terms of Acquiring Fund’s prospectus in effect at the
time of such sales, each such outstanding share is fully paid, non-assessable and has full voting rights in accordance with the terms of the Acquiring Fund Corporate Documents;
|
(3)
|
Acquiring Fund is a closed-end investment company of the management type registered as such under the 1940 Act;
|
(4)
|
Except as disclosed in the Acquiring Fund Disclosure Documents, such counsel does not know of any material suit, action or legal or administrative proceeding
pending or threatened against Acquiring Fund, the unfavorable outcome of which would materially and adversely affect Acquiring Fund;
|
(5)
|
Acquiring Fund Shares to be issued pursuant to the terms of this Plan have been duly authorized and, when issued and delivered as provided in this Plan, will
have been validly issued and fully paid and will be non-assessable by Acquiring Fund;
|
(6)
|
All corporate actions required to be taken by Acquiring Fund to authorize this Plan and to effect the Acquisition contemplated hereby have been duly authorized
by all necessary action on the part of Acquiring Fund;
|
(7)
|
The execution, delivery or performance of this Plan by Acquiring Fund will not violate any provision of the Acquiring Fund Corporate Documents, or the
provisions of any agreement or other instrument known to such counsel to which Acquiring Fund is a party or by which Acquiring Fund is otherwise bound; this Plan is the legal, valid and binding
|
obligation of Acquiring Fund and is enforceable against Acquiring Fund in accordance with its terms; and
|
(8)
|
The Acquiring Fund N-14 Registration Statement has been declared or, by operation of rule, has become effective under the 1933 Act, and, to the best knowledge
of such counsel, no stop order suspending the effectiveness of such Registration Statement has been issued, and no proceedings for such purpose have been instituted or are pending before or threatened by the SEC under the 1933 Act, and
nothing has come to counsel’s attention that causes it to believe that, at the time the Acquiring Fund N-14 Registration Statement became effective, or at the Closing, such Registration Statement (except for the financial statements and
other financial and statistical data included therein, as to which counsel need not express an opinion), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and such counsel knows of no legal or government proceedings required to be described in the Acquiring Fund N-14 Registration Statement, or of any contract or document of a character required
to be described in the Acquiring Fund N-14 Registration Statement that is not described as required.
|
(i)
|
That the Acquired Fund shall have received a certificate from the President or a Vice President of Acquiring Fund to the effect that, except for such
disclosures provided by the Acquired Fund, to the best knowledge and belief of such officer, the statements contained in the Acquiring Fund N-14 Registration Statement, at the time the Acquiring Fund N-14 Registration Statement became
effective, at the date of the signing of this Plan, and at the Closing, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein
not misleading.
|
(j)
|
That the Acquiring Fund N-14 Registration Statement with respect to Acquiring Fund Shares to be delivered to the respective shareholders of the Acquired Fund in
accordance with this Plan shall have become effective, and no stop order suspending the effectiveness of the Acquiring Fund N-14 Registration Statement or any amendment or supplement thereto, shall have been issued prior to the Closing
Date or shall be in effect at Closing, and no proceedings for the issuance of such an order shall be pending or threatened on that date.
|
(k)
|
That the Acquiring Fund shall have received a certificate from the President or a Vice President of Acquired Fund to the effect that, except for such
disclosures provided by the Acquiring Fund, to the best knowledge and belief of such officer,
|
the statements contained in the definitive Preferred Shares Proxy Statement, at the date of the signing of this Plan, and at the Closing, did not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
|
(l)
|
That Acquiring Fund Shares to be delivered hereunder shall be eligible for sale with each state commission or agency with which such eligibility is required in
order to permit Acquiring Fund Shares lawfully to be delivered to each holder of the Acquired Fund Shares of the Acquired Fund.
|
(m)
|
That, at the Closing, there shall be transferred to Acquiring Fund the respective aggregate Net Assets of the Acquired Fund comprising at least 90% in fair
market value of the total net assets and 70% of the fair market value of the total gross assets recorded on the books of the Acquired Fund on the Closing Date.
|
(n)
|
That there be delivered to Acquiring Fund (1) a statement of the respective tax basis and holding period of all investments to be transferred by the Acquired
Fund to the Acquiring Fund, (2) a copy (which may be in electronic form) of the shareholder ledger accounts including, without limitation, the name, address and taxpayer identification number of each shareholder of record, the number of
shares of beneficial interest held by each shareholder, the dividend reinvestment elections applicable to each shareholder, and the backup withholding and nonresident alien withholding certifications, notices or records on file with the
Acquired Fund with respect to each shareholder, for all of the shareholders of record of the Acquired Fund as of the close of business on the Valuation Date, who are to become holders of the Acquiring Fund as a result of the transfer of
Acquired Fund assets, certified by its transfer agent or its President or Vice-President to the best of their knowledge and belief, (3) the tax books and records of the Acquired Fund for purposes of preparing any returns required by law
to be filed for tax periods ending after the Closing Date, and (4) if reasonably requested by the Acquiring Fund in writing, all FASB ASC 740-10-25 (formerly FIN 48) work papers and supporting statements pertaining to the Acquired
Fund. The foregoing information to be provided within such timeframes as is mutually agreed by the parties. The Acquired Fund agrees to cooperate with the Acquiring Fund in filing any Return, amended return or claim for refund,
determining a liability for taxes or a right to a refund of taxes or participating in or conducting any audit or other proceeding in respect of taxes. The Acquired Fund agrees to retain for a period of seven (7) years following the
Closing Date all returns and work papers and all material records or other documents relating to tax matters for taxable periods ending on or before the Closing Date.
|
(o)
|
That all consents of other parties, and all other consents, orders and permits of federal, state and local regulatory authorities (including those of the SEC
and of state Blue Sky securities authorities, including any necessary “no-action” positions or exemptive orders from such federal and state authorities), required to permit consummation of the Acquisition contemplated hereby shall have
been obtained, except where failure to obtain any such consent, order or permit would
|
not involve a risk of a material adverse effect on the assets or properties of the Acquired Fund or Acquiring Fund.
|
(p)
|
That the NYSE American Exchange shall have approved the listing of the additional Acquiring Fund Common Shares to be issued to common shareholders of the
Acquired Fund in connection with the Acquisition.
|
(q)
|
That the Acquiring Fund shall have obtained written confirmation from Fitch Ratings, Inc. that (a) consummation of the transactions contemplated by this
Agreement will not impair the ratings assigned by such rating agencies to the existing Acquiring Fund Series 2049 Muni-MultiMode Preferred Shares, and (b) the Acquiring Fund Preferred Shares to be issued pursuant to Section 1 of this
Agreement will be rated AA by Fitch Ratings, Inc.
|
(r)
|
That the Acquired Fund and the Acquiring Fund shall have received on or before the Closing Date an opinion of Sidley Austin LLP (“Sidley”) in form and substance
reasonably acceptable to the Acquired Fund and the Acquiring Fund, as to the matters set forth on Schedule 8(s). In rendering such opinion, Sidley may request and rely upon representations contained in certificates of officers of the
Acquired Fund, the Acquiring Fund, DMC and others, and the officers of the Acquired Fund, the Acquiring Fund and DMC shall use their best efforts to make available such truthful certificates.
|
9.
|
Fees and Expenses
|
(a)
|
The Acquired Fund and Acquiring Fund each represents and warrants to the other that there are no broker or finders’ fees payable by it in connection with the
transactions provided for herein.
|
(b)
|
The expenses of entering into and carrying out the provisions of this Plan shall be borne one-third by Acquiring Fund, one-third by the Acquired Fund, and
one-third by DMC.
|
10.
|
Termination; Postponement; Waiver; Order
|
(a)
|
Anything contained in this Plan to the contrary notwithstanding, this Plan may be terminated and the Acquisition abandoned at any time (whether before or after
approval thereof by the shareholders of the Acquired Fund) prior to the Closing, or the Closing may be postponed as follows:
|
(1)
|
by mutual consent of the Acquired Fund and Acquiring Fund;
|
(2)
|
by Acquiring Fund if any condition of its obligations set forth in Section 8 has not been fulfilled or waived; or
|
(3)
|
by the Acquired Fund if any condition of its obligations set forth in Section 8 has not been fulfilled or waived.
|
(b)
|
If the transactions contemplated by this Plan have not been consummated by [March 31], 2022, the Plan shall automatically terminate on that date, unless a later
date is agreed to by both the Acquired Fund Board and the Acquiring Fund Board.
|
(c)
|
In the event of termination of this Plan pursuant to the provisions hereof, the Plan shall become void and have no further effect, and neither the Acquired Fund
nor Acquiring Fund, nor their directors/trustees, officers or agents or the shareholders of the Acquired Fund or Acquiring Fund shall have any liability in respect of this Plan.
|
(d)
|
At any time prior to the Closing, any of the terms or conditions of this Plan may be waived by the party who is entitled to the benefit thereof by action taken
by the Acquiring Fund Board or the Acquired Fund Board, as the case may be, if, in the judgment of such Board, such action or waiver will not have a material adverse effect on the benefits intended under this Plan to its shareholders,
on behalf of whom such action is taken.
|
(e)
|
The respective representations and warranties contained in Sections 4 through 6 hereof shall expire with and be terminated by the Acquisition, and neither the
Acquired Fund nor Acquiring Fund, nor any of their officers, directors/trustees, agents or shareholders shall have any liability with respect to such representations or warranties after the Closing. This provision shall not protect any
officer, director, agent or shareholder of the Acquired Fund or Acquiring Fund against any liability to the entity for which that officer, director, agent or shareholder so acts or to its shareholders to which that officer, director,
agent or shareholder would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties in the conduct of such office.
|
11.
|
Entire Agreement and Amendments
|
12.
|
Counterparts
|
13.
|
Notices
|
If to the Acquired Fund
[Delaware Investments Colorado
Municipal Income Fund, Inc./ Delaware Investments Minnesota Municipal Income Fund II, Inc.] 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 Attn: Secretary |
If to Acquiring Fund:
Delaware Investments National
Municipal Income Fund 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 Attn: Secretary |
If to DMC:
Delaware Management Company
100 Independence, 610 Market Street Philadelphia, PA 19106-2354 Attn: Secretary |
14.
|
Governing Law
|
[DELAWARE INVESTMENTS COLORADO MUNICIPAL INCOME FUND, INC./ DELAWARE INVESTMENTS MINNESOTA MUNICIPAL INCOME FUND II, INC.]
|
|
Attest:_______________________
|
By:__________________________
|
Name:
|
Name:
|
Title:
|
Title:
|
DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND
|
|
Attest:________________________
|
By:_____________________________
|
Name:
|
Name:
|
Title:
|
Title:
|
DELAWARE MANAGEMENT COMPANY, a series of Macquarie Investment Management Business Trust
|
|
Attest:________________________
|
By:________________________________
|
Name:
|
Name:
|
Title:
|
Title:
|
|
Year ended
|
||||
3/31/21
|
3/31/20
|
3/31/19
|
3/31/18
|
3/31/17
|
|
Net asset value, beginning of period
|
$14.32
|
$14.90
|
$14.90
|
$14.93
|
$15.66
|
Income from investment operations:
|
|||||
Net investment income1
|
0.54
|
0.54
|
0.58
|
0.63
|
0.67
|
Net realized and unrealized gain (loss)
|
0.95
|
(0.40)
|
0.04
|
0.03
|
(0.68)
|
Total from investment operations
|
1.49
|
0.14
|
0.62
|
0.66
|
(0.01)
|
Less dividends and distributions from:
|
|||||
Net investment income
|
(0.49)
|
(0.57)
|
(0.62)
|
(0.69)
|
(0.72)
|
Net realized gain
|
(0.06)
|
(0.15)
|
-–
|
–
|
–
|
Total dividends and distributions
|
(0.55)
|
(0.72)
|
(0.62)
|
(0.69)
|
(0.72)
|
Net asset value, end of period
|
$15.26
|
$14.32
|
$14.90
|
$14.90
|
$14.93
|
Market value, end of period
|
$14.14
|
$13.27
|
$14.17
|
$14.39
|
$14.70
|
Total return based on:2
|
|||||
Net asset value
|
10.83%
|
0.58%
|
4.50%
|
4.44%
|
(0.07%)
|
Market value
|
10.82%
|
(1.99%)
|
2.90%
|
2.44%
|
2.24%
|
Ratios and supplemental data:
|
|||||
Net assets applicable to common shares, end of period (000 omitted)
|
$73,808
|
$69,284
|
$72,051
|
$72,050
|
$72,240
|
Ratio of expenses to average net assets applicable to common shareholders3
|
1.52%
|
2.10%
|
2.14%
|
1.82%
|
1.60%
|
Ratio of net investment income to average net assets applicable to common shareholders4
|
3.57%
|
3.56%
|
3.98%
|
4.14%
|
4.32%
|
Portfolio turnover
|
19%
|
31%
|
7%
|
11%
|
12%
|
Leverage analysis:
|
|||||
Value of preferred shares outstanding (000 omitted)5
|
30,000
|
30,000
|
30,000
|
30,000
|
30,000
|
Net asset coverage per share of preferred shares, end of period5
|
346,027
|
330,946
|
340,171
|
340,167
|
340,799
|
Liquidation value per share of preferred shares5
|
100,000
|
100,000
|
100,000
|
100,000
|
100,000
|
1
|
Net investment income is reduced by dividends paid to preferred shareholders from net investment income of $0.07, $0.16, $0.17, $0.14, and $0.11 per share for the years ended March 31, 2021, 2020, 2019, 2018,
and 2017, respectively and from realized capital gains of $0.01 per share for the year ended March 31, 2021.
|
2
|
Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any,
are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount or a decrease in the premium of the market value to the net asset value from the beginning to the end of such periods. Conversely, total investment return based
on net asset value will be lower than total investment return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the
end of such periods.
|
3
|
The ratio of expenses to average net assets applicable to common shareholders excluding interest expense for the years ended March 31, 2021, 2020, 2019, 2018, and 2017 were 0.95%, 1.06%, 1.00%, 0.93%, and 0.90%,
respectively.
|
4
|
The ratio of net investment income excluding interest expense to average net assets for the years ended March 31, 2021, 2020, 2019, 2018, and 2017 were 4.14%, 4.60%, 5.12%, 5.03%, and 5.03%, respectively.
|
5
|
In November 2011, the Fund issued a series of 300 variable rate preferred shares, with a liquidation preference of $100,000 per share (Series 2016 Shares).The Series 2016 Shares were redeemed on February 2, 2016
and replaced with Series 2021 Shares, which were the same amount and value as the Fund’s Series 2016 Shares. On April 25, 2019, the Fund redeemed the Series 2021 Shares, and replaced them with Series 2049 Muni-MultiMode Preferred Shares
(Series 2049), which have the same amount and value as the Series 2021 Shares.
|
|
Year ended
|
||||
3/31/16
|
3/31/15
|
3/31/14
|
3/31/13
|
3/31/12
|
|
Net asset value, beginning of period
|
$15.55
|
$14.43
|
$15.37
|
$15.01
|
$13.37
|
Income from investment operations:
|
|||||
Net investment income1
|
0.705
|
0.706
|
0.700
|
0.733
|
0.638
|
Net realized and unrealized gain (loss)
|
0.120
|
1.104
|
(0.935)
|
0.416
|
1.582
|
Total from investment operations
|
0.825
|
1.810
|
(0.235)
|
1.149
|
2.220
|
Less dividends and distributions from:
|
|||||
Net investment income
|
(0.715)
|
(0.690)
|
(0.690)
|
(0.690)
|
(0.580)
|
Net realized gain
|
-–
|
-–
|
(0.015)
|
(0.099)
|
–
|
Total dividends and distributions
|
(0.715)
|
(0.690)
|
(0.705)
|
(0.789)
|
(0.580)
|
Net asset value, end of period
|
$15.66
|
$15.55
|
$14.43
|
$15.37
|
$15.01
|
Market value, end of period
|
$15.07
|
$14.35
|
$13.33
|
$14.84
|
$14.60
|
Total return based on:2
|
|||||
Net asset value
|
5.85%
|
13.12%
|
(0.97%)
|
7.71%
|
17.19%
|
Market value
|
10.38%
|
13.01%
|
(5.25%)
|
6.92%
|
22.31%
|
Ratios and supplemental data:
|
|||||
Net assets applicable to common shares, end of period (000 omitted)
|
$75,771
|
$75,226
|
$69,781
|
$74,349
|
$72,613
|
Ratio of expenses to average net assets applicable to common shareholders3
|
1.52%
|
1.43%
|
1.49%
|
1.44%
|
0.95%
|
Ratio of net investment income to average net assets applicable to common shareholders4
|
4.59%
|
4.65%
|
4.90%
|
4.72%
|
4.46%
|
Portfolio turnover
|
13%
|
14%
|
26%
|
8%
|
64%
|
Leverage analysis:
|
|||||
Value of preferred shares outstanding (000 omitted)5
|
30,000
|
30,000
|
30,000
|
30,000
|
30,000
|
Net asset coverage per share of preferred shares, end of period5
|
352,571
|
350,753
|
332,602
|
347,829
|
342,045
|
Liquidation value per share of preferred shares5
|
100,000
|
100,000
|
100,000
|
100,000
|
100,000
|
1
|
Net investment income is reduced by dividends paid to preferred shareholders from net investment income of $0.079, $0.077, $0.078, $0.079, and $0.031 per share for the years ended March 31, 2016, 2015, 2014,
2013, and 2012, respectively, and from realized capital gains of $0.002, $0.006, and $0.000 per share for the years ended March 31, 2014, 2013, and 2012, respectively.
|
2
|
Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any,
are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount or a decrease in the premium of the market value to the net asset value from the beginning to the end of such periods. Conversely, total investment return based
on net asset value will be lower than total investment return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the
end of such periods.
|
3
|
The ratio of expenses to average net assets applicable to common shareholders excluding interest expense for the years ended March 31, 2016, 2015, 2014, 2013, and 2012 were 1.01%, 0.92%, 0.94%, 0.89%, and 0.73%,
respectively.
|
4
|
The ratio of net investment income excluding interest expense for the years ended March 31, 2016, 2015, 2014, 2013 and 2012 were 5.11%, 5.16%, 5.45%, 5.27%, and 4.68%, respectively.
|
5
|
In November 2011, the Fund issued a series of 300 variable rate preferred shares, with a liquidation preference of $100,000 per share (Series 2016 Shares). The Series 2016 Shares were redeemed on Feb. 2, 2016
and replaced with Series 2021 Shares, which are the same amount and value as the Fund’s Series 2016 Shares.
|
|
Year ended
|
||||
3/31/21
|
3/31/20
|
3/31/19
|
3/31/18
|
3/31/17
|
|
Net asset value, beginning of period
|
$14.31
|
$14.48
|
$14.27
|
$14.41
|
$15.05
|
Income from investment operations:
|
|||||
Net investment income1
|
0.53
|
0.46
|
0.48
|
0.51
|
0.55
|
Net realized and unrealized gain (loss)
|
0.48
|
(0.15)
|
0.18
|
(0.12)
|
(0.59)
|
Total from investment operations
|
1.01
|
0.31
|
0.66
|
0.39
|
(0.04)
|
Less dividends and distributions from:
|
|||||
Net investment income
|
(0.40)
|
(0.45)
|
(0.45)
|
(0.53)
|
(0.60)
|
Net realized gain
|
–
|
(0.03)
|
-–
|
–
|
–
|
Total dividends and distributions
|
(0.40)
|
(0.48)
|
(0.45)
|
(0.53)
|
(0.60)
|
Net asset value, end of period
|
$14.92
|
$14.31
|
$14.48
|
$14.27
|
$14.41
|
Market value, end of period
|
$13.19
|
$12.37
|
$12.63
|
$12.63
|
$14.56
|
Total return based on:2
|
|||||
Net asset value
|
7.54%
|
2.45%
|
5.26%
|
2.82%
|
(0.27%)
|
Market value
|
9.99%
|
1.53%
|
3.73%
|
(9.94%)
|
3.16%
|
Ratios and supplemental data:
|
|||||
Net assets applicable to common shares, end of period (000 omitted)
|
$171,679
|
$164,589
|
$166,540
|
$164,193
|
$165,754
|
Ratio of expenses to average net assets applicable to common shareholders3
|
1.32%
|
1.97%
|
2.10%
|
1.78%
|
1.59%
|
Ratio of net investment income to average net assets applicable to common shareholders4
|
3.61%
|
3.12%
|
3.40%
|
3.48%
|
3.69%
|
Portfolio turnover
|
2%
|
14%
|
13%
|
22%
|
9%
|
Leverage analysis:
|
|||||
Value of preferred shares outstanding (000 omitted)5
|
75,000
|
75,000
|
75,000
|
75,000
|
75,000
|
Net asset coverage per share of preferred shares, end of period5
|
328,825
|
319,452
|
322,053
|
318,924
|
321,006
|
Liquidation value per share of preferred shares5
|
100,000
|
100,000
|
100,000
|
100,000
|
100,000
|
1
|
Net investment income is reduced by dividends paid to preferred shareholders from net investment income of $0.07, $0.16, $0.18, $0.14, and $0.12 per share for the years ended March 31, 2021, 2020, 2019, 2018,
and 2017, respectively.
|
2
|
Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any,
are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount or a decrease in the premium of the market value to the net asset value from the beginning to the end of such periods. Conversely, total investment return based
on net asset value will be lower than total investment return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the
end of such periods.
|
3
|
The ratio of expenses to average net assets applicable to common shareholders excluding interest expense for the years ended March 31, 2021, 2020, 2019, 2018, and 2017 were 0.83%, 0.89%, 0.85%, 0.81%, and 0.82%,
respectively.
|
4
|
The ratio of net investment income excluding interest expense to average net assets for the years ended March 31, 2021, 2020, 2019, 2018, and 2017 were 4.10%, 4.20%, 4.65%, 4.45%, and 4.46%, respectively.
|
5
|
In November 2011, the Fund issued a series of 750 variable rate preferred shares, with a liquidation preference of $100,000 per share (Series 2016 Shares).The Series 2016 Shares were redeemed on February 2, 2016
and replaced with Series 2021 Shares, which were the same amount and value as the Fund’s Series 2016 Shares. On April 25, 2019, the Fund redeemed the Series 2021 Shares, and replaced them with Series 2049 Muni-MultiMode Preferred Shares
(Series 2049), which have the same amount and value as the Series 2021 Shares.
|
|
Year ended
|
||||
3/31/16
|
3/31/15
|
3/31/14
|
3/31/13
|
3/31/12
|
|
Net asset value, beginning of period
|
$14.97
|
$14.31
|
$15.27
|
$14.94
|
$13.70
|
Income from investment operations:
|
|||||
Net investment income1
|
0.629
|
0.641
|
0.648
|
0.715
|
0.640
|
Net realized and unrealized gain (loss)
|
0.081
|
0.689
|
(0.802)
|
0.345
|
1.180
|
Total from investment operations
|
0.710
|
1.330
|
(0.154)
|
1.060
|
1.820
|
Less dividends and distributions from:
|
|||||
Net investment income
|
(0.630)
|
(0.670)
|
(0.690)
|
(0.690)
|
(0.580)
|
Net realized gain
|
-–
|
-–
|
(0.116)
|
(0.040)
|
–
|
Total dividends and distributions
|
(0.630)
|
(0.670)
|
(0.806)
|
(0.730)
|
(0.580)
|
Net asset value, end of period
|
$15.05
|
$14.97
|
$14.31
|
$15.27
|
$14.94
|
Market value, end of period
|
$14.70
|
$13.85
|
$13.34
|
$15.63
|
$14.23
|
Total return based on:2
|
|||||
Net asset value
|
5.30%
|
9.80%
|
(0.36%)
|
7.18%
|
13.90%
|
Market value
|
11.17%
|
8.97%
|
(9.26%)
|
15.18%
|
17.95%
|
Ratios and supplemental data:
|
|||||
Net assets applicable to common shares, end of period (000 omitted)
|
$173,119
|
$172,280
|
$164,599
|
$175,629
|
$171,835
|
Ratio of expenses to average net assets applicable to common shareholders3
|
1.46%
|
1.40%
|
1.51%
|
1.40%
|
0.93%
|
Ratio of net investment income to average net assets applicable to common shareholders4
|
4.24%
|
4.33%
|
4.54%
|
4.65%
|
4.44%
|
Portfolio turnover
|
16%
|
10%
|
17%
|
24%
|
44%
|
Leverage analysis:
|
|||||
Value of preferred shares outstanding (000 omitted)5
|
75,000
|
75,000
|
75,000
|
75,000
|
75,000
|
Net asset coverage per share of preferred shares, end of period5
|
330,825
|
329,707
|
319,465
|
334,172
|
329,113
|
Liquidation value per share of preferred shares5
|
100,000
|
100,000
|
100,000
|
100,000
|
100,000
|
1
|
Net investment income is reduced by dividends paid to preferred shareholders from net investment income of $0.083, $0.081, $0.076, $0.084, and $0.033 per share for the years ended March 31, 2016, 2015, 2014,
2013, and 2012, respectively, and from realized capital gains of $0.014, $0.005, and $0.000 per share for the years ended March 31, 2014, 2013, and 2012, respectively.
|
2
|
Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any,
are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount or a decrease in the premium of the market value to the net asset value from the beginning to the end of such periods. Conversely, total investment return based
on net asset value will be lower than total investment return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the
end of such periods.
|
3
|
The ratio of expenses to average net assets applicable to common shareholders excluding interest expense the years ended March 31, 2016, 2015, 2014, 2013, and 2012 were 0.90%, 0.85%, 0.88%, 0.82%, and 0.70%,
respectively.
|
4
|
The ratio of net investment income excluding interest expense to average net assets for the years ended March 31, 2016, 2015, 2014, 2013, and 2012 were 4.80%, 4.88%, 5.17%, 5.23%, and 4.67%, respectively.
|
5
|
In November 2011, the Fund issued a series of 750 variable rate preferred shares, with a liquidation preference of $100,000 per share (Series 2016 Shares). The Series 2016 Shares were redeemed on Feb. 2, 2016
and replaced with Series 2021 Shares, which are the same amount and value as the Fund’s Series 2016 Shares.
|
|
Year ended
|
||||
3/31/21
|
3/31/20
|
3/31/19
|
3/31/18
|
3/31/17
|
|
Net asset value, beginning of period
|
$13.71
|
$14.44
|
$14.34
|
$14.31
|
$15.02
|
Income from investment operations:
|
|||||
Net investment income1
|
0.58
|
0.54
|
0.59
|
0.64
|
0.66
|
Net realized and unrealized gain (loss)
|
1.12
|
(0.57)
|
0.11
|
(0.01)
|
(0.69)
|
Total from investment operations
|
1.70
|
(0.03)
|
0.70
|
0.63
|
(0.03)
|
Less dividends and distributions from:
|
|||||
Net investment income
|
(0.51)
|
(0.55)
|
(0.60)
|
(0.60)
|
(0.68)
|
Net realized gain
|
(0.06)
|
(0.15)
|
-–
|
–
|
–
|
Total dividends and distributions
|
(0.57)
|
(0.70)
|
(0.60)
|
(0.60)
|
(0.68)
|
Net asset value, end of period
|
$14.84
|
$13.71
|
$14.44
|
$14.34
|
$14.31
|
Market value, end of period
|
$13.12
|
$12.24
|
$12.69
|
$12.62
|
$12.94
|
Total return based on:2
|
|||||
Net asset value
|
13.20%
|
(0.24%)
|
5.71%
|
4.84%
|
0.01%
|
Market value
|
12.11%
|
1.35%
|
5.56%
|
2.04%
|
(1.50%)
|
Ratios and supplemental data:
|
|||||
Net assets applicable to common shares, end of period (000 omitted)
|
$67,182
|
$62,085
|
$65,399
|
$64,924
|
$64,792
|
Ratio of expenses to average net assets applicable to common shareholders3
|
1.66%
|
2.27%
|
2.31%
|
1.97%
|
1.73%
|
Ratio of net investment income to average net assets applicable to common shareholders4
|
4.03%
|
3.69%
|
4.19%
|
4.36%
|
4.45%
|
Portfolio turnover
|
19%
|
33%
|
16%
|
50%
|
13%
|
Leverage analysis:
|
|||||
Value of preferred shares outstanding (000 omitted)5
|
30,000
|
30,000
|
30,000
|
30,000
|
30,000
|
Net asset coverage per share of preferred shares, end of period5
|
323,942
|
306,949
|
317,996
|
316,412
|
315,898
|
Liquidation value per share of preferred shares5
|
100,000
|
100,000
|
100,000
|
100,000
|
100,000
|
1
|
Net investment income is reduced by dividends paid to preferred shareholders from net investment income of $0.08, $0.17, $0.18, $0.14, and $0.12 per share for the years ended March 31, 2021, 2020, 2019, 2018,
and 2017, respectively and from realized capital gains of 0.01 per share for the year ended March 31, 2021.
|
2
|
Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any,
are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount or a decrease in the premium of the market value to the net asset value from the beginning to the end of such periods. Conversely, total investment return based
on net asset value will be lower than total investment return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the
end of such period.
|
3
|
The ratio of expenses to average net assets applicable to common shareholders excluding interest expense for the years ended March 31, 2021, 2020, 2019, 2018, and 2017 were 1.02%, 1.11%, 1.05%, 0.98%, and 0.94%,
respectively.
|
4
|
The ratio of net investment income excluding interest expense to average net assets for the years ended March 31, 2021, 2020, 2019, 2018, and 2017 were 4.67%, 4.84%, 5.45%, 5.35%, and 5.24%, respectively.
|
5
|
In March 2012, the Fund issued a series of 300 variable rate preferred shares, with a liquidation preference of $100,000 per share (Series 2017 Shares). The Series 2017 Shares were redeemed on February 2, 2016
and replaced with Series 2021 Shares, which were the same amount and value as the Fund’s Series 2017 Shares. On April 25, 2019, the Fund redeemed the Series 2021 Shares, and replaced them with Series 2049 Muni-MultiMode Preferred Shares
(Series 2049), which have the same amount and value as the Series 2021 Shares.
|
|
Year ended
|
||||
3/31/16
|
3/31/15
|
3/31/14
|
3/31/13
|
3/31/12
|
|
Net asset value, beginning of period
|
$14.97
|
$13.81
|
$14.99
|
$14.02
|
$12.62
|
Income from investment operations:
|
|||||
Net investment income1
|
0.696
|
0.711
|
0.710
|
0.722
|
0.531
|
Net realized and unrealized gain (loss)
|
0.114
|
1.219
|
(1.180)
|
0.858
|
1.409
|
Total from investment operations
|
0.810
|
1.930
|
(0.470)
|
1.580
|
1.940
|
Less dividends and distributions from:
|
|||||
Net investment income
|
(0.760)
|
(0.770)
|
(0.710)
|
(0.610)
|
(0.540)
|
Total dividends and distributions
|
(0.760)
|
(0.770)
|
(0.710)
|
(0.610)
|
(0.540)
|
Net asset value, end of period
|
$15.02
|
$14.97
|
$13.81
|
$14.99
|
$14.02
|
Market value, end of period
|
$13.80
|
$13.14
|
$12.35
|
$14.48
|
$13.24
|
Total return based on:2
|
|||||
Net asset value
|
6.35%
|
14.99%
|
(2.41%)
|
11.56%
|
15.87%
|
Market value
|
11.32%
|
12.87%
|
(9.65%)
|
14.12%
|
13.19%
|
Ratios and supplemental data:
|
|||||
Net assets applicable to common shares, end of period (000 omitted)
|
$68,008
|
$67,804
|
$62,526
|
$67,876
|
$63,487
|
Ratio of expenses to average net assets applicable to common shareholders3
|
1.70%
|
1.60%
|
1.58%
|
1.56%
|
1.02%
|
Ratio of net investment income to average net assets applicable to common shareholders4
|
4.72%
|
4.86%
|
5.17%
|
4.86%
|
3.96%
|
Portfolio turnover
|
25%
|
38%
|
40%
|
42%
|
101%
|
Leverage analysis:
|
|||||
Value of preferred shares outstanding (000 omitted)5
|
30,000
|
30,000
|
30,000
|
30,000
|
30,000
|
Net asset coverage per share of preferred shares, end of period5
|
326,693
|
326,013
|
308,420
|
326,254
|
311,625
|
Liquidation value per share of preferred shares5
|
100,000
|
100,000
|
100,000
|
100,000
|
100,000
|
1
|
Net investment income is reduced by dividends paid to preferred shareholders from net investment income of $0.084, $0.083, $0.085, $0.090, and $0.004 per share for the years ended March 31, 2016, 2015, 2014,
2013, and 2012, respectively.
|
2
|
Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any,
are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount or a decrease in the premium of the market value to the net asset value from the beginning to the end of such periods. Conversely, total investment return based
on net asset value will be lower than total investment return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the
end of such periods.
|
3
|
The ratio of expenses to average net assets applicable to common shareholders excluding interest expense for the years ended March 31, 2016, 2015, 2014, 2013, and 2012 were 1.13%, 1.03%, 0.96%, 0.96%, and 0.99%,
respectively.
|
4
|
The ratio of net investment income excluding interest expense to average net assets for the years ended March 31, 2016, 2015, 2014, 2013, and 2012 were 5.29%, 5.44%, 5.79%, 5.46%, and 3.99%, respectively.
|
5
|
In March 2012, the Fund issued a series of 300 variable rate preferred shares, with a liquidation preference of $100,000 per share (Series 2017 Shares). The Series 2017 Shares were redeemed on Feb. 2, 2016 and
replaced with Series 2021 Shares, which are the same amount and value as the Fund’s Series 2017 Shares.
|
Acquisition of the Assets and Liabilities of:
|
DELAWARE INVESTMENTS COLORADO MUNICIPAL INCOME FUND, INC.
|
By:
|
DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND
|
Acquisition of the Assets and Liabilities of:
|
DELAWARE INVESTMENTS MINNESOTA MUNICIPAL INCOME FUND II, INC.
|
By:
|
DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND
|
GENERAL INFORMATION
|
3 |
INVESTMENT OBJECTIVES AND POLICIES
|
3
|
MANAGEMENT OF THE TRUST
|
3
|
CODE OF ETHICS
|
4
|
PROXY VOTING POLICY
|
4
|
INVESTMENT ADVISORY AND OTHER SERVICES
|
5
|
PORTFOLIO MANAGERS
|
6
|
BROKERAGE ALLOCATION AND OTHER PRACTICES
|
8
|
TAX STATUS
|
10
|
Name, Address, and Birthdate
|
Position(s) Held with the Funds
|
Length of Time Served
|
Principal Occupation(s) During the Past Five Years
|
Number of Funds in Fund Complex Overseen by Director
|
Other Directorships Held by Director
|
Officers
|
|||||
David F. Connor
100 Independence,
610 Market Street
Philadelphia, PA
19106-2354
December 1963
|
Senior Vice President, General Counsel, and Secretary
|
Senior Vice President, since May 2013; General Counsel since May 2015; Secretary since October 2005
|
David F. Connor has served in various capacities at different times at Macquarie Investment Management.1
|
160
|
None2
|
Daniel V. Geatens
100 Independence,
610 Market Street
Philadelphia, PA
19106-2354
October 1972
|
Senior Vice President and Treasurer
|
Senior Vice President and Treasurer since October 2007
|
Daniel V. Geatens has served in various capacities at different times at Macquarie Investment Management.
|
160
|
None2
|
Richard Salus
100 Independence,
610 Market Street
Philadelphia, PA
19106-2354
October 1963
|
Senior Vice President and Chief Financial Officer
|
Senior Vice President and Chief Financial Officer since November 2006
|
Richard Salus has served in various capacities at different times at Macquarie Investment Management.
|
160
|
None
|
Fund
|
March 31, 2021
|
March 31, 2020
|
March 31, 2019
|
Delaware Investments Colorado Municipal Income Fund, Inc.
|
$409,946
|
$412,791
|
$404,050
|
Delaware Investments Minnesota Municipal Income Fund II, Inc.
|
$977,240
|
$982,055
|
$951,275
|
Delaware Investments National Municipal Income Fund
|
$380,546
|
$387,623
|
$376,735
|
Fund
|
March 31, 2021
|
March 31, 2020
|
March 31, 2019
|
Delaware Investments Colorado Municipal Income Fund, Inc.
|
$7,479
|
$7,690
|
$7,824
|
Delaware Investments Minnesota Municipal Income Fund II, Inc.
|
$12,306
|
$12,766
|
$13,003
|
Delaware Investments National Municipal Income Fund
|
$7,229
|
$7,465
|
$7,565
|
Fund
|
March 31, 2021
|
March 31, 2020
|
March 31, 2019
|
Delaware Investments Colorado Municipal Income Fund, Inc.
|
$20,684
|
$25,491
|
$35,348
|
Delaware Investments Minnesota Municipal Income Fund II, Inc.
|
$39,383
|
$48,253
|
$57,350
|
Delaware Investments National Municipal Income Fund
|
$19,262
|
$24,124
|
$35,988
|
No. of Accounts with
|
Total Assets in Accounts
|
|||
No. of
|
Total Assets
|
Performance-
|
with Performance-
|
|
Accounts
|
Managed
|
Based Fees
|
Based Fees
|
|
Gregory A. Gizzi
|
||||
Registered Investment
|
18
|
$7.0 billion
|
0
|
$0
|
Companies
|
||||
Other Pooled
|
0
|
$0
|
0
|
$0
|
Investment Vehicles
|
||||
Other Accounts
|
36
|
$3.8 billion
|
0
|
$0
|
Stephen J. Czepiel
|
||||
Registered Investment
|
18
|
$7.0 billion
|
0
|
$0
|
Companies
|
||||
Other Pooled
|
0
|
$0
|
0
|
$0
|
Investment Vehicles
|
||||
Other Accounts
|
23
|
$3.5 billion
|
0
|
$0
|
Jake van Roden
|
||||
Registered Investment
|
17
|
$6.3 billion
|
0
|
$0
|
Companies
|
||||
Other Pooled
|
0
|
$0
|
0
|
$0
|
Investment Vehicles
|
||||
Other Accounts
|
0
|
$0
|
0
|
$0
|
Item 15.
|
Indemnification.
|
|||
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to Trustees, officers or persons controlling the Registrant pursuant to the
foregoing provisions, the Registrant has been informed that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore
unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer, or controlling person or the Registrant and the principal
underwriter in connection with the successful defense of any action, suit or proceeding) is asserted against the Registrant by such Trustee, officer or controlling person or Invesco Distributors in connection with the Shares being
registered, such indemnification by it is against public policy, as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
|
||||
Item 16.
|
Exhibits. The following exhibits are incorporated by reference to the Registrant’s previously filed registration statements on Form N-14 indicated below, except as noted:
|
|||
(1)
|
Copies of the charter of the Registrant as now in effect;
|
|||
(a)
|
Restated and Amended Declaration of Trust (February 14, 1993) for the Registrant (formerly,
Voyageur Florida Insured Municipal Income Fund) incorporated into this filing by reference to the Registration Statement on Form N-14 (File No. 333-172578) filed on March 2, 2011.
|
|||
(i)
|
Amendment No. 1 (December 1, 2001) to Restated and Amended Declaration of Trust for the
Registrant (formerly, Voyageur Florida Insured Municipal Income Fund) incorporated into this filing by reference to the Registration Statement on Form N-14 (File No. 333-172578) filed on March 2, 2011.
|
|||
(ii)
|
Amendment (June 22, 2004) to the Restated and Amended Declaration of Trust for the
Registrant (formerly, Voyageur Florida Insured Municipal Income Fund) incorporated into this filing by reference to the Registration Statement on Form N-14 (File No. 333-172578) filed on March 2, 2011.
|
|||
(iii)
|
Amendment (December 9, 2004) to the Restated and Amended Declaration of Trust for the
Registrant (formerly, Voyageur Florida Insured Municipal Income Fund) incorporated into this filing by reference to the Registration Statement on Form N-14 (File No. 333-172578) filed on March 2, 2011.
|
|||
(iv)
|
Executed Amendment (October 12, 2007) to the Restated and Amended Declaration of Trust for
the Registrant incorporated into this filing by reference to the Registration Statement on Form N-14 (File No. 333-172578) filed on March 2, 2011.
|
|||
(2)
|
Copies of the existing By-Laws or corresponding instruments of the Registrant;
|
|||
(a)
|
Amended and Restated By-Laws (October 15, 2007) incorporated into this filing by reference
to the Registration Statement on Form N-14 (File No. 333-172578) filed on March 2, 2011
|
|||
(i)
|
Executed Amendment (January 16, 2019) to the Amended and Restated By-Laws incorporated
into this filing by reference to the Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
|||
(3)
|
Copies of any voting trust agreement affecting more than 5 percent of any class of equity securities of the Registrant;
|
|||
Not applicable.
|
(4)
|
Copies of the agreement of acquisition, reorganization, merger, liquidation and any amendments to it;
|
||||||
(a)
|
Form of Agreement and Plan of Acquisition is filed herewith as Exhibit A to the Prospectus/Information Statement.
|
||||||
(5)
|
Copies of all instruments defining the rights of holders of the securities being registered, including copies, where applicable, of the relevant portion of the articles of incorporation or by-laws of the Registrant;
|
||||||
None other than those contained in Exhibits (1) and (2).
|
|||||||
(6)
|
Copies of all investment advisory contracts relating to the management of the assets of the Registrant;
|
||||||
(a)
|
Investment Management Agreement (January 4, 2010) between Delaware Management Company (a series of Macquarie Investment
Management Business Trust) and the Registrant incorporated into this filing by reference to Exhibit 77.Q.1(e) of the Fund’s Form NSAR-B, filed on May 28, 2010.
|
||||||
(7)
|
Copies of each underwriting or distribution contract between the Registrant and a principal underwriter, and specimens or copies of all agreements between principal underwriters and dealers;
|
||||||
Not applicable.
|
|||||||
(8)
|
Copies of all bonus, profit sharing, pension or other similar contracts or arrangements wholly or partly for the benefit of directors or officers of the Registrant in their capacity as such. Furnish a reasonably detailed description of
any plan that is not set forth in a formal document;
|
||||||
Not applicable.
|
|||||||
(9)
|
Copies of all custodian agreements and depository contracts under Section 17(f) of the Investment Company Act of 1940, as amended (the “1940 Act”), for securities and similar investments of the Registrant, including the schedule of
remuneration;
|
||||||
(a)
|
Mutual Fund Custody and Services Agreement (July 20, 2007) with The Bank of New York Mellon (formerly, Mellon Bank, N.A.) incorporated into this
filing by reference to the Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
||||||
(i)
|
Executed Amendment (January 1, 2014) to Mutual Fund Custody and Services Agreement incorporated into this filing by reference to the
Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
||||||
(ii)
|
Executed Amendment No. 2 (July 1, 2017) to Mutual Fund Custody and Services Agreement incorporated into this filing by reference to the
Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
||||||
(iii)
|
Executed Amendment No. 4 (July 19, 2019) to Mutual Fund Custody and Services Agreement incorporated into this filing by reference to the
Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
||||||
(10)
|
Copies of any plan entered into by Registrant pursuant to Rule 12b-1 under the 1940 Act and any agreements with any person relating to implementation of the plan, and copies of any plan entered into by Registrant pursuant to Rule 18f-3
under the 1940 Act, any agreement with any person relating to implementation of the plan, any amendment to the plan, and a copy of the portion of the minutes of the meeting of the Registrant’s trustees describing any action taken to
revoke the plan;
|
||||||
Not applicable.
|
|||||||
(11)
|
An opinion and consent of counsel as to the legality of the securities being registered, indicating whether they will, when sold, be legally issued, fully paid and non-assessable;
|
||||||
(a)
|
Opinion and Consent of Counsel incorporated into this filing by reference to the
Registrant's Registration Statement on Form N-14 (File No. 333-258757) filed on September 24, 2021. |
(12)
|
An opinion, and consent to their use, of counsel or, in lieu of an opinion, a copy of the revenue ruling from the Internal Revenue Service, supporting the tax matters and consequences to shareholders discussed in the prospectus;
|
|||||
(a)
|
Opinion and Consent of Counsel regarding tax matters to be filed by Amendment.
|
|||||
(13)
|
Copies of all material contracts of the Registrant not made in the ordinary course of business which are to be performed in whole or in part on or after the date of filing the registration statement;
|
|||||
(a)
|
Transfer Agent Services Agreement (December 8, 2000) between Mellon Investor Services LLC and the Registrant (formerly, Voyageur Florida
Insured Municipal Income Fund) incorporated into this filing by reference to the Fund’s Registration Statement on Form N-14 (File No. 333-172578) filed on March 2, 2011.
|
|||||
(b)
|
Executed Amended and Restated Fund Accounting and Financial Administration Services Agreement (January 1, 2014) between The Bank of New York
Mellon and the Registrant incorporated into this filing by reference to the Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
|||||
(i)
|
Executed Amendment No. 1 (July 1, 2017) to Amended and Restated Fund Accounting and Financial Administration Services Agreement incorporated
into this filing by reference to the Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
|||||
(c)
|
Executed Amended and Restated Fund Accounting and Financial Administration Oversight Agreement (January 1, 2014) between Delaware Service
Company, Inc. and the Registrant incorporated into this filing by reference to the Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
|||||
(i)
|
Executed Assignment and Assumption Agreement (November 1, 2014) between Delaware Service Company, Inc. and Delaware Investments Fund Services
Company relating to the Oversight Agreement incorporated into this filing by reference to the Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
|||||
(ii)
|
Executed Amendment No. 1 (September 1, 2017) to Amended and Restated Fund Accounting and Financial Administration Oversight Agreement
incorporated into this filing by reference to the Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
|||||
(14)
|
Copies of any other opinions, appraisals or rulings, and consents to their use relied on in preparing the registration statement and required by Section 7 of the 1933 Act;
|
|||||
(a)
|
||||||
(b)
|
||||||
(c)
|
||||||
(15)
|
All financial statements omitted pursuant to Item 14(a)(1);
|
|||||
Not applicable.
|
||||||
(16)
|
Manually signed copies of any power of attorney pursuant to which the name of any person has been signed to the registration statement; and
|
(a)
|
Powers of Attorney (July 2021) incorporated into this filing by reference to the
Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
||
(17)
|
Any additional exhibits which the Registrant may wish to file.
|
||
(a)
|
Code of Ethics for Macquarie Investment Management, Delaware Funds®
by Macquarie and Optimum Fund Trust (September 8, 2020) incorporated into this filing by reference to the Registration Statement on Form N-14 (File No. 333-258757) filed on August 12, 2021.
|
||
Item 17.
|
Undertakings.
|
||
(1)
|
The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this registration statement by
any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act, the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by
persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
|
||
(2)
|
The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the registration statement and will not be
used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide offering of them.
|
||
(3)
|
The undersigned Registrant agrees to file by Post-Effective Amendment the opinion and consent of counsel regarding the tax consequences of the proposed reorganization required by
Item 16(12) of Form N-14 within a reasonable time after receipt of such opinion.
|
||
DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND
|
|
By:
|
/s/ Richard Salus
|
Richard Salus
Senior Vice President/Chief Financial Officer |
Signature
|
Title
|
Date
|
||
Shawn K. Lytle
|
*
|
President/Chief Executive Officer
|
September 27, 2021
|
|
Shawn K. Lytle
|
(Principal Executive Officer) and Trustee
|
|||
Jerome D. Abernathy
|
*
|
Trustee
|
September 27, 2021
|
|
Jerome D. Abernathy
|
||||
Thomas L. Bennett
|
*
|
Chair and Trustee
|
September 27, 2021
|
|
Thomas L. Bennett
|
||||
Ann D. Borowiec
|
*
|
Trustee
|
September 27, 2021
|
|
Ann D. Borowiec
|
||||
Joseph W. Chow
|
*
|
Trustee
|
September 27, 2021
|
|
Joseph W. Chow
|
||||
H. Jeffrey Dobbs
|
*
|
Trustee
|
September 27, 2021
|
|
H. Jeffrey Dobbs
|
||||
John A. Fry
|
*
|
Trustee
|
September 27, 2021
|
|
John A. Fry
|
||||
Joseph Harroz, Jr.
|
*
|
Trustee
|
September 27, 2021
|
|
Joseph Harroz, Jr.
|
Sandra A.J. Lawrence
|
*
|
Trustee
|
September 27, 2021
|
|
Sandra A.J. Lawrence
|
||||
Frances A. Sevilla-Sacasa
|
*
|
Trustee
|
September 27, 2021
|
|
Frances A. Sevilla-Sacasa
|
||||
Thomas K. Whitford
|
*
|
Trustee
|
September 27, 2021
|
|
Thomas K. Whitford
|
||||
Christianna Wood
|
*
|
Trustee
|
September 27, 2021
|
|
Christianna Wood
|
||||
Janet L. Yeomans
|
*
|
Trustee
|
September 27, 2021
|
|
Janet L. Yeomans
|
||||
/s/ Richard Salus
|
Senior Vice President/Chief Financial Officer
|
September 27, 2021
|
||
Richard Salus
|
(Principal Financial Officer)
|
|||
|
*By: /s/ Richard Salus
|
|
|
Richard Salus
|
|
|
as Attorney-in-Fact for each of the persons indicated
|
|
|
(Pursuant to Powers of Attorney previously filed)
|
|
Exhibit No.
|
Exhibit
|